Deliveroo IPO: Case Study

In just eight years, Deliveroo has grown from delivering food from three restaurants in Chelsea to delivering in over 800 towns and cities across 12 markets globally. Now its founder Will Shu has taken his company public.

The highlights for UK and European tech company founders:

  •  Multi-billion valuations can be achieved in London, where there is a high level of demand for fast growing technology companies
  •  Founders can stay in control, scaling and growing their company as they transition from private to public 
  •  This is the largest tech company IPO in London by market cap to date

Deliveroo by the numbers

£4.08bn – gross transaction value in 2020

115,000 restaurants and grocers

More than 100,000 riders

Almost one million meals delivered to frontline NHS staff during the pandemic

Under 30 minutes – average time for riders to fulfil an order

£13 billion – estimated size of online home delivery segment in Deliveroo’s current markets

Tech in London 

High-growth tech and consumer internet companies accounted for 40% of the capital raised on London’s markets in 2020. London Stock Exchange is proud to welcome another successful UK tech listing to the Main Market. Deliveroo is the largest tech company IPO in London by market cap, to date and, on a global scale, the largest IPO of an online food delivery business outside of the US.

This is also one of the largest IPOs by market cap of a founder-led UK business. Deliveroo’s listing provides a further demonstration that innovative, ambitious tech companies from around the world are accessing London’s markets to raise their profile, reward employees and investors, and to enable the wider community to share in their future growth. Deliveroo’s community offer, which is being delivered via Primary Bid, is testament to that.

Murray Roos, Group Director of Capital Markets, LSEG

 

An interactive session with Will Shu, Founder and CEO, Deliveroo

An IPO is a milestone for Deliveroo but there have been many pivotal moments in the company’s development. What key moment do you feel is the most important?ase study

Our first international expansion was a pivotal moment for the company. In 2015, we expanded outside of the UK, launching in France, Belgium and Ireland. We were able to prove there was an appetite for on-demand food delivery and the logistics model, which we pioneered, outside of the UK for the first time.

 

Was an IPO always part of your strategic vision for Deliveroo?

I never set out to be a founder or a CEO. I wanted a better customer experience. I wanted to get great food delivered from amazing London restaurants. That’s why for me listing in London is an incredibly proud and exciting moment, but not one I planned for.

Becoming a public company will support our mission to become the definitive online food delivery company. The IPO will enable us to continue to invest in innovation, develop new tech tools to support restaurants and grocers, provide riders with more work, and bring consumers food options they love.

What is the scale and nature of the online food opportunity, and how will the IPO help Deliveroo take advantage of this?

Bringing the food category online represents an enormous market opportunity. In 2019, total food service and grocery sales amounted to £1.2 trillion across our current markets, according to OC&C. Our aim is to bring more of this existing demand online. The way we think about it is simple: there are 21 meal occasions in a week – breakfast, lunch, and dinner – seven days a week. Right now, less than one of those 21 transactions takes place online and we are working to change that.

The IPO includes a community offer. Why is it important for the IPO to be accessible to customers/retail investors?

Our customers have played a central role in supporting our growth and we wanted to give them the chance to share in the next stage of our journey. Far too often normal people are locked out of IPOs, and the only participants are the institutional investors. I wanted to give as many customers as possible the chance to become shareholders, which is why we made £50m of shares available to them, alongside our restaurant partners and riders.

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