UK markets closed
  • FTSE 100

    6,483.43
    -168.53 (-2.53%)
     
  • FTSE 250

    20,910.37
    -287.75 (-1.36%)
     
  • AIM

    1,183.25
    -8.61 (-0.72%)
     
  • GBP/EUR

    1.1532
    +0.0034 (+0.30%)
     
  • GBP/USD

    1.3922
    -0.0091 (-0.65%)
     
  • BTC-GBP

    33,961.54
    -306.77 (-0.90%)
     
  • CMC Crypto 200

    912.88
    -20.25 (-2.17%)
     
  • S&P 500

    3,811.15
    -18.19 (-0.48%)
     
  • DOW

    30,932.37
    -469.64 (-1.50%)
     
  • CRUDE OIL

    61.66
    -1.87 (-2.94%)
     
  • GOLD FUTURES

    1,733.00
    -42.40 (-2.39%)
     
  • NIKKEI 225

    28,966.01
    -1,202.26 (-3.99%)
     
  • HANG SENG

    28,980.21
    -1,093.96 (-3.64%)
     
  • DAX

    13,786.29
    -93.04 (-0.67%)
     
  • CAC 40

    5,703.22
    -80.67 (-1.39%)
     

Deliveroo fundraising values it at $7bn as it gears up for stock market debut

Suban Abdulla
·3-min read
A Deliveroo courier seen in Dublin city center during Level 5 Covid-19 lockdown.  On Friday, 15 January, 2021, in Dublin, Ireland. (Photo by Artur Widak/NurPhoto via Getty Images)
The company operates across 12 countries, mostly in western Europe but also in United Arab Emirates, Australia, Singapore and Hong Kong. Photo: Artur Widak/NurPhoto via Getty Images

The latest fundraising round for Deliveroo has valued the takeaway firm at more than $7bn (£5.1bn).

The company, which is readying for a bumper stock market listing, raised $180m from its investors, including from minority stakeholder Amazon (AMZN). The firm had already raised $1.5bn from investors.

It plans to use the money to innovate, set up for delivery only kitchen sites, and grow its online grocery business, it said on Sunday.

"This investment will help us to continue to innovate, developing new tech tools to support restaurants, to provide riders with more work and to extend choice for customers," Deliveroo founder and chief executive Will Shu said.

Deliveroo announced last week that it would expand and add a further 100 cities and towns in the UK. It already has its 140,000 restaurants on its platform.

The app founded by Shu — a former investment banker — in 2013, is set to hold an initial public offering (IPO) in the coming months, in what would be the biggest new share issue in London in the last three years.

US investment banks, JP Morgan (JPM) and Goldman Sachs (GS) were hired to advise on the float.

READ MORE: Energy giant EDF draws up plans to float UK tech firm Pod Point

Deliveroo’s heavy investment in technology led to a loss of £319.9m in 2019, which forced the company to take out a short-term £198m loan to mitigate the losses.

But since then, the coronavirus pandemic saw a significant rise in appetite for online food delivery. This supercharged Deliveroo, more than doubling its revenues in the UK and Ireland and pushing it into operating profitability during the second and third quarters of 2020.

The company operates across 12 countries, mostly in western Europe but also in United Arab Emirates, Australia, Singapore and Hong Kong.

In May 2019, the UK’s competition regulator approved Amazon's purchase of a 16% stake in Deliveroo in August, despite objections from local competitors Just Eat Takeaway (JET.L), Europe’s largest online food delivery group, and Domino's Pizza.

It has not yet confirmed whether it will list in London or New York, but Brexit may have dented the London’s IPO appeal. A listing in London would amp up the competition however.

Last week, Jitse Groen, Takeaway.com’s chief executive, said that he would “make life very, very, very complicated for the competitors” in the capital by undercutting them on delivery prices and investing heavily in a new courier network.

While, it did not state how much each investor had contributed in the latest funding round, Amazon’s stake is not expected to rise as a result of its participation in the fundraising.

The latest round of fundraising was led by US investors Durable Capital Partners and Fidelity Management & Research.

WATCH: Should I pay off debt or save money during the coronavirus pandemic?