Sales soar at Deliveroo but profits fall again

Deliveroo’s profits have taken another hit following another year of heavy investment and expansion.

After revealing pre-tax losses of £199m in 2017, the online delivery outfit said pre-tax losses had fallen further to £232m for the year to 31 December 2018.

The business said it had “continued to invest heavily” in its service in order to fund further expansion in terms of restaurant numbers in existing markets, including the UK where it plans to launch in another 50 towns and cities in 2019.

It also launched into new markets including Taiwan and Kuwait last year.

Other investments include the launch of Marketplace+, which allows restaurants with their own delivery operations to appear on Deliveroo. It said the launch saw 7,000 restaurants added to the platform.

It also doubled investment in its in-house technology to £18m.

Despite profits falling, sales are soaring, rising 72% in 2018 to £476m, up from £277m in 2017.

The business said the “strength of Deliveroo’s growth and business model is reflected in the $575 million investment in the company in May 2019, led by Amazon, taking the total raised by Deliveroo to over $1.5 billion.”

Will Shu, Deliveroo co-founder and CEO said the business was “growing from strength-to-strength and expanding across our markets.

“We’re focused on our mission of becoming the definitive food company, and we’ve continued to invest heavily in expansion, technology and new products to meet this ambition. We are leading the field in innovation in food delivery, helping our restaurant partners to boost their sales and providing more well-paid work for riders.

“Deliveroo has come a long way in the past six years, but this is just the beginning. I can’t wait to work with new great local restaurants to deliver meals to millions of more customers around the globe.”