Deliveroo IPO could reach £8.8bn valuation

Deliveroo has set the price range per share at between £3.90 and £4.60, in advance of its planned IPO on the London Stock Exchange.

It implies an estimated market capitalisation of between £7.6bn and £8.8bn on admission, with the offer to consist of up to 384,615,384 shares.

The offer will consist of new shares, expected to raise gross proceeds of approximately £1bn, and existing shares to be sold by certain existing shareholders.

The business has said it intends to use the net proceeds from the issue of its new shares to invest in growth opportunities, including increasing the number of transactions where people buy their food online, the development of new innovations, and to further develop its growth businesses, in particular Editions, Plus and Signature.

Deliveroo’s total transaction volume (GTV) increased by 121% year-on-year (yoy) in the first two months of 2021, compared to 2020, with GTV in the UK and Ireland up 13% yoy.

Deliveroo said that fourth quarter 2020 run-rate GTV amounted to over £5bn, with its underlying gross profit margin as a percentage of GTV up from 5.8% in 2018, to 8.8% in 2020.

Will Shu, founder and CEO of Deliveroo, said: “Becoming a public company will enable us to continue to invest in innovation, developing new tech tools to support restaurants and grocers, providing riders with more work and extending choice for consumers, bringing them the food they love from more restaurants than ever before. This will help us in our mission to become the definitive food company.

“We have seen a strong start to 2021 and we are only at the start of an exciting journey in a large, fast-growing online food delivery market, with a huge opportunity ahead.”

Deliveroo is expected to publish its prospectus later today.