During the past year, the prevalence of the COVID-19 pandemic has resulted in individuals worldwide being confined to their homes, leading to a significant rise in the use of food delivery services such as Uber Eats and Postmates. In the UK, Deliveroo experienced a 64.3% surge in revenue in 2020 due to this increased demand. Deliveroo has revealed intentions to take their business public, and with their widespread adoption and strong support from Amazon, they are positioned to establish a new IPO record.
Today, Deliveroo unveiled the pricing range for their imminent IPO between 3.90 and 4.60 pounds per share. This pricing indicates a company valuation of 7.6 to 8.8 billion pounds, which equates to a substantial $12 billion at current exchange rates. If their IPO is finalized at this valuation, it would surpass the previous record set by Glencore’s IPO in 2011.
“We have observed a robust beginning to 2021 and believe we are only at the outset of an exciting venture in a large and rapidly expanding online food delivery market, with enormous potential ahead,” remarked Deliveroo’s founder and CEO, Will Shu, in a statement.
Deliveroo sets a price range of between £3.90 and £4.60 per share for its upcoming IPO. That would value the company at £8.8 billion (over $12 billion) at the top of the range. Details: https://t.co/jYRuJiB7hI
— Ryan Browne (@Ryan_Browne_) March 22, 2021
The crucial factor that could impact Deliveroo’s future profitability is whether their widespread popularity will be sustained once COVID-19 vaccinations reach a critical mass. Before the lockdowns due to COVID-19, the company experienced losses amounting to 223.7 million pounds.
“Deliveroo has undoubtedly received a significant boost due to Covid,” stated Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. “Despite the enduring demand for takeout food, there may be a decline in demand as individuals opt to reserve tables at their preferred restaurants when restrictions are lifted.”
