Amazon backs Deliveroo for IPO with $10 billion valuation

Deliveroo raised another $180 million from investors in July last year, valuing the company at $7 billion at the time, and reports suggest its post-IPO valuation could be around $10 billion.

A document filed last week included details about Deliveroo's dual-class share structure, which will give Deliveroo Chief Executive Will Shu 20 votes per share, while all other shareholders will only get one vote per share.

Last week, the company also revealed that it had made a loss of £223.7 million. The 2020 losses were significantly lower than they were in 2019, however, when the London-based company recorded a loss of £317 million. While the eight-year-old company is still loss-making, its revenues climbed from £2.5 billion in 2019 to £4.1 billion in 2020.

Deliveroo, which has weathered a competition review, pivoted from near failure in 2020 to a minority investment from Amazon, ended the year with an operating profit swung to a loss as demand for its online food delivery service surged due to coronavirus social distancing measures .

Today, Deliveroo claims to have more than 115,000 food merchants, 100,000 restaurants and millions of consumers in 12 countries. The document shows that 6 million orders are placed on Deliveroo every month.

Amazon backed Deliveroo in May 2019, leading a $575 million funding round in exchange for a 16% stake in the business.

In July 2019, the Competition and Markets Authority, the UK’s antitrust regulator, concluded that Deliveroo’s cash injection from Amazon could reduce competition by eliminating the possibility that the e-commerce giant could re-enter the market and Deliveroo could become differentiated. It froze investment for nearly a year while it investigated.

The deal , which dismayed rivals Just Eat and Domino's Pizza, was approved by the CMA in August after Deliveroo said it could collapse without capital.

As interest in the food delivery market continues to grow, UBS analysts have picked seven stocks in the sector that they expect to rise by 30%.

The bank said people were ordering takeaways more often and spending more when they did, meaning the industry could be worth nearly $400bn by 2024. Estimates from Euromonitor meanwhile said the market could be worth $1tn in the next decade.

Deliveroo

IPO

Amazon