The Deliveroo application displayed on a smartphone screen.
Thiago Prudencio | SOPA images | LightRocket via Getty Images
LONDON – British food delivery company Deliveroo is seeking a valuation of up to £ 8.8 billion ($ 12.2 billion) in its next initial public offering in London.
The company, which is supported by Amazon, has established a price range of between £ 3.90 and £ 4.60 per share for its successful IPO, implying an estimated market capitalization of between £ 7.6 billion and £ 8.8 billion .
Deliveroo’s market debut is expected to be one of the UK’s largest listings in years. The company announced plans to go public in London earlier this month, giving UK capital a major victory after Brexit as it aims to attract more high-growth technology companies.
A government-backed review called for reforms to the London listing regime, including the ability to list shares of two classes, such as those launched by companies like Google and Facebook. Currently, companies cannot do this in the premium segment of the London stock market, which prevents them from being eligible for inclusion in benchmarks like the FTSE 100.
Deliveroo opted for a two-class share structure that gives CEO and founder Will Shu enhanced voting rights. Shu will receive 20 votes per share, while other investors will be entitled to only one. Deliveroo expects to raise gross revenues of £ 1 billion from its IPO.
“We are proud to be listed in London, the city where Deliveroo started,” said Shu in a statement on Monday.
“Becoming a public company will allow us to continue to invest in innovation, developing new technology tools to support restaurants and grocery stores, providing passengers with more work and extending options to consumers, bringing the food they love to more restaurants than Never.”
Deliveroo says it will use the IPO’s resources to enhance its platform and deepen on-demand grocery deliveries, which have benefited greatly from the coronavirus pandemic.
In a trade update on Monday, Deliveroo said the total value of the transactions he processed more than doubled in the first two months of the year, receiving a boost from the UK’s coronavirus blockade. Volumes grew 130% over the previous year in the United Kingdom and Ireland, while other markets grew 112%.
Deliveroo went from almost a failure in 2020 amid a review of competition in Amazon’s minority investment in the company, to operating profitability at the end of the year, thanks to the pandemic increase in demand for online delivery applications.
“We have seen a strong start to 2021 and we are just at the beginning of an exciting journey in a large and fast-growing online food delivery market, with a great opportunity ahead,” said Shu.
Deliveroo has set aside £ 50 million in shares to be offered to its customers. The company is promoting the offer on a large banner near the top of its application. This comes at a time when retail traders have been piling up on the stock market in recent months, a phenomenon that has led to huge fluctuations in stock prices with short short positions like GameStop and AMC.