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Deliveroo aiming for $10bn valuation in London IPO

Deliveroo committed to making London its “long-term home”

Deliveroo has its sights set on a $10bn valuation ahead of its initial public offering, which would be the highest valued new listing in London for a number of years.

The food delivery business, which saw demand rocket during the pandemic, is looking to benefit from new rules making it easier for companies to list in the UK’s capital city.

Deliveroo, which operates internationally, also committed to making London its “long-term home”.

Will Shu, who founded Deliveroo in London eight years ago, said the city was “a great place to live, work, do business and eat. I’m so proud and excited about a potential listing here”.

If Deliveroo is able to float at the level of its target range, the food delivery company will have a market cap in excess of £7bn.

Following a private financing in early 2021, Deliveroo was valued at $7bn, a figure that since Amazon led up an investment round n 2019.

In a private financing in January Deliveroo was valued at about $7bn, a figure that had already doubled since an Amazon-led investment in 2019.

Professor John Colley, Associate Dean of Warwick Business School and an expert on tech firm IPOs, commented on the prospective valuation.

“This valuation of Deliveroo seems excessive for a business which is still many years from profit, especially given that some hold significant doubt whether the home takeaway delivery model can become profitable outside of London.”

“Indeed, the sole basis for this valuation appears to be the immense amounts of cash looking for growth technology stocks.”

Colley also outlined difficulties in making profit in an already squeezed industry.

“Ultimately Deliveroo will have to charge customers and restaurants far more to make a profit, but that brings its own difficulties. For restaurants, margins are already narrow. And at what price do customers simply decide to collect their own meals?”

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