Deliveroo CEO Will Shu.
Aurelien Morissard | IP3 | Getty Images
LONDON – Deliveroo is planning to raise £ 1 billion ($ 1.38 billion) in its initial public offering next month, when it is expected to debut on the London Stock Exchange.
The food delivery service plans to offer up to 256,456,256 new shares at £ 3.90 to £ 4.60 per share, according to the company’s prospectus, published on Tuesday. Existing shareholders also plan to sell up to 128,205,128 shares.
The IPO will value the company between £ 7.6 billion and £ 8.8 billion, higher than suggested by previous reports. Even at the bottom end of the range, Deliveroo will still be the largest technology IPO in Europe so far this year and the largest in Britain in a decade.
Deliveroo’s IPO is set to make the company’s major shareholders hundreds of millions. Some of them will divest some shares in the IPO, but investors are planning to keep most of them.
The biggest individual winner will be Deliveroo’s CEO, Will Shu. After the IPO, he will hold 115,227,441 shares, or 6.3% of the share capital. He will also have more than 50% of the voting rights. Assuming that Deliveroo’s prices are £ 4.25 per share, the midpoint of the range, Shu’s stake will be worth around £ 490 million. It can, however, go up to £ 530 million if the price is at the upper end of the range.
Overall, Amazon is the biggest winner with the IPO. The technology giant will have an 11.5% stake (209,720,160 shares) in Deliveroo after the IPO, which will be worth around £ 1 billion, depending on the price. It currently holds 15.8%, but plans to sell 23,302,240 shares for between £ 90.8 million and £ 107.2 million, depending on the price.
Meanwhile, Index Ventures, which also supported Facebook and Slack, will have a 7.5% stake of around £ 577 million if the price is in the middle range, while DST Global, which also supported the UK fintech Checkout will have a 7.4% stake of £ 569 million. Both companies plan to sell around 15 million shares for around £ 60 million.
Other VCs that are expected to win big include Greenoaks, T. Rowe and Fidelity, who will also have stakes of around £ 450 million to £ 500 million each. Meanwhile, Bridgepoint and Accel will have stakes of around £ 300 million if the price is in the middle range.
The Deliveroo listing will take place on April 7. The stock ticker is currently unknown, but options include “ROO” and “DROO”.
The company’s prospectus shows that Deliveroo’s revenue grew 54% in 2020, while the gross margin rose from 24% to 30%. However, Deliveroo still recorded an annual loss of £ 224 million.
This comes after American rival DoorDash was valued at $ 60 billion at an IPO on the New York Stock Exchange in December. Meanwhile, Grubhub was valued at just $ 5 billion when it went public in 2016.