With its unicorn status, Deliveroo’s IPO is likely to be “the biggest coup in terms of size” for the London Stock Exchange so far this year, believes Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

It is currently valued at around £5bn after it raised £129 million in investment in January, and it’s been reported that listing could see it achieve a market value of up to £7.5bn.

Commenting on the news that Deliveroo has announced its intention to float, she said: “Investors will be hoping that Deliveroo will go door to door with a retail offer and not offer everything to the institutions.”

She said that while delivery companies have come into their own during the pandemic, appetite for a slice of the delivery sector is high. Door Dash’s IPO in the US saw shares rise by 86% above their initial public offering price.

“Deliveroo, has been benefiting from this takeaway trend with rising revenues and clearly the company has judged that the time is ripe to go public,” she added.

“There is of course a risk that demand for home deliveries will wane once the pandemic has eased. It’s likely that the public will be desperate to eat out as soon as they can, ditching a knock on the door and a bag of food for a real restaurant experience.”

Competition is also high and margins often slim for delivery companies, but the potential is there for delivery companies to make strong returns if the logistics are performed well and the company can establish itself as a fixture of the industry, said Streeter. 

Its IPO is due to launch on 8 March.

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