Deliveroo to give top riders £10,000 each following the IPO
Deliveroo has revealed plans for its initial public offering (IPO), while confirming a 54% growth in sales and £224m of losses in 2020.
The online food retailer announced its intention to float on Monday with shares expected to begin trading by early April.
Deliveroo’s public announcement comes days after the UK government committed to altering a ruling so that founders would be able maintain control of their companies despite selling shares to investors on the stock market.
Will Shu, co-founder of Deliveroo and chief executive, will have 20 votes per share, while every other shareholder will have one vote per share, in line with the dual-class share structure included in Monday’s filing.
Shu has confirmed he will offer the company’s top riders £10,000 each following the IPO, which is expected to earn the founder a significant payday.
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.
Russ Mould, investment director at AJ Bell, refocused attention on the company’s loss during the pandemic, despite favourable market conditions.
“After the fanfare of how Deliveroo is going to reward drivers with bonuses and give customers a chance to buy the shares, here comes the hard facts. The most important point is how the company remains loss-making despite experiencing a surge in business going through its platform during the pandemic.
“It’s hard to see it’ll have another year when market factors were so much in its favour. Lockdowns kept people at home for months at a time and online grocery slots were hard to come by, so demand for takeaways shot up. A cynic might ask, if Deliveroo couldn’t deliver a profit against that backdrop, when will it?”
“Fans of the business will point out that it has narrowed its losses by nearly 30% and that its underlying gross profit has shot up, both in absolute terms and as a percentage of the gross transaction value. That’s likely to be enough to fuel interest for many people in the shares when they come to the London market.”