Deliveroo reveals that it lost $ 309 million in 2020 before the London IPO

LONDON —Deliveroo, the Amazon-backed food delivery service, has revealed that last year it lost £ 223.7 million ($ 309 million) in plans to float on the London Stock Exchange. were published Monday.

Deliveroo’s losses are substantially lower than in 2019, when the London-based firm recorded a loss of £ 317 million. While the eight-year-old remains negative, its revenue amounted to £ 4.1 billion in 2020, compared to £ 2.5 billion in 2019.

No date has been officially announced for Deliveroo’s initial public offering, but it is likely to be in the coming weeks. Goldman Sachs and JP Morgan Cazenove have been appointed joint global coordinators.

According to reports, Deliveroo could be valued at about $ 10 billion in stock market listing. He recently raised $ 180 million, giving him a $ 7 billion valuation. Along with Amazon, Deliveroo is also supported by Durable Capital Partners, Fidelity, T. Rowe Price, General Catalyst, Index Ventures and Accel.

In the company’s “Expected Intention To Float” presentation released Monday, Deliveroo CEO Will Shu said he “never set out to be a founder or CEO” and that he “didn’t read TechCrunch”.

“I’m not one of those Silicon Valley types with a million ideas,” former Morgan Stanley analyst said in a letter included in the presentation. “I had an idea. An idea that came out of personal frustration. An idea that fanatically obsessed me: I wanted them to take excellent food to amazing restaurants in London.”

Deliveroo went from near-failure in 2020 amid a review of competition over Amazon’s minority investment to operating profitability toward the end of the year thanks to increased demand for blockchain-driven online shopping services of the coronavirus.

Today Deliveroo claims to have more than 115,000 food merchants and 100,000 restaurants and millions of consumers in 12 countries. The presentation shows that six million orders are placed on Deliveroo each month.

But Deliveroo “keeps starting,” according to Shu.

“Our ambitions have increased as we begin to truly understand and execute the opportunity we have in the face of online food,” he said.

The presentation includes details on Deliveroo’s dual-class share structure, which will allow Shu to get 20 votes per share, while the remaining shareholders will only be entitled to one vote per share.

This structure, which will give Shu enhanced voting rights and more control over the company’s management, will be in place for three years.

It comes after a government-backed review called for reforms to London’s listing system, including the possibility of listing dual-class actions initiated by Google and Facebook.

Deliveroo plans to book shares worth £ 50 million to customers across the UK.

“We are proud to allow our customers to participate in a floating future and have the opportunity to buy shares,” Shu said. “Your loyalty and custom have helped build our business. I want you to have the opportunity to share our future.”

Deliveroo said it will use IPO revenue to improve its app, expand “Editions” kitchens just for delivery, and delve deeper into a la carte grocery deliveries, currently offered by supermarkets like Waitrose, Co-op, Londis, Aldi and Carrefour.

Deliveroo also plans to donate £ 16 million to its riders through a new ‘Gratitude Fund’, with a handful of loyal riders receiving payments of £ 10,000. Others will receive 1,000, 500, 200, or 100 pounds, depending on the number of orders they have delivered. The average payment will be GBP 440.

Over the years, some of the company’s drivers have complained about the amount Deliveroo pays them and have campaigned to be classified as workers instead of contractors, making them eligible for issues such as illness and the holidays.

Amazon backed Deliveroo in May 2019, leading a $ 575 million funding round in exchange for a 16% stake in the business.

In July 2019, the UK’s antitrust regulator, the Competition and Markets Authority, argued that Deliveroo’s Amazon cash injection could reduce competition by eliminating the possibility of the e-commerce giant returning to enter the market, while Deliveroo “would cease to be different.” “He froze the investment for almost a year while researching.

To the disappointment of rivals Just Eat and Domino’s Pizza, the deal was approved by the CMA in August after Deliveroo said it could stop working without the capital.

– Additional reports from CNBC’s Ryan Browne.