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COVID helps Deliveroo turn a profit as orders and customers surge

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·Senior City Correspondent, Yahoo Finance UK
·2-min read
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Groceries now account for 10% of all Deliveroo's UK business. Photo: Toby Melville/Reuters
Groceries now account for 10% of all Deliveroo's UK business. Photo: Toby Melville/Reuters

The COVID-19 pandemic has rapidly accelerated growth at online takeaway business Deliveroo, its chief executive said on Thursday.

Speaking at the virtual Web Summit conference, Williams Shu said this “extraordinary and crazy period” had accelerated the adoption of online food delivery by “two or three years.”

“What we see from COVID is the importance of online food delivery has grown hugely,” he said.

Shu said Deliveroo was growing by more than 100% in the UK and Ireland, and had reached operational profitability for the last six month.

Shu, who cofounded Deliveroo in London in 2013, said the service was now signing up more customers, seeing existing customers place more orders, and seeing the average value of orders on its platform grow.

“The world we operate in has changed entirely,” Shu said. “What hasn’t changed? Customers still want great food.”

READ MORE: UK supermarkets 'do the right thing' repaying £1.7bn COVID-19 tax breaks

Deliveroo launched online grocery ordering through its app during the pandemic, partnering with the likes of Co-op, Waitrose, Aldi, and Carrefour (CA.PA) in France. Despite not existing 12 months ago, grocery delivery now accounts for 10% of all Deliveroo’s UK business and is the fastest growing part of the business.

Shu also flagged the strong performance of Deliveroo’s “Editions” concept. Colloquially known as “dark kitchens,” Deliveroo “Editions” are kitchens in shipping containers that cook food only for delivery through Deliveroo’s network. The startup partners with existing restaurants to set up these kitchens.

Shu said Deliveroo would invest “aggressively” to expand Editions globally in 2021. He said delivery-only kitchens had “evolved from a nice-to-have expansion play for restaurants to really a fundamental part of restaurants’ strategy.”

Deliveroo’s most recent set of accounts show the startup lost £232m ($309m) last year on revenues of £476m. The startup has raised over $1.5bn (£1.1bn) from investors including Amazon (AMZN) since it started. The company is rumoured to be working on plans for an IPO in London next year.

WATCH: Deliveroo prepares for £2.5bn London IPO

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