Online food delivery player Deliveroo has tipped that its upcoming London IPO will value the company at £8.8bn.
The company, which announced its plans to go public a few weeks ago, said it would price its shares at between £3.90 and $4.60, giving it a higher valuation than the £7bn figure that was bandied around recently.
Deliveroo’s listing is expected to be one of the biggest for the City of London this year and a vote of confidence in the London Stock Exchange as a listing venue post-Brexit.
Will Shu, its chief executive, said that Deliveroo has seen a strong start to 2021, compared to 12 months ago. Shu owns a 6.2pc stake in the company that he is expected to sell a portion of in the flotation, according to Sky News.
In January and February this year, its gross transaction volume, which measures the number of orders it receives on the platform, was up 121pc compared to a year prior. In the UK and Ireland markets, that increase was 130pc.
Deliveroo’s fortunes have turned around greatly in the last 12 to 18 months when Amazon’s large investment in the company was in jeopardy while it juggled the soaring demand for online food ordering during lockdown.
The e-commerce giant invested in the company as part of a $575m funding round but the UK’s competition regulator stepped in to probe the deal and assess its fairness.
Deliveroo said that without the significant investment, it was at risk of running out of money and going under.
The Competition and Markets Authority eventually approved the deal last year giving Deliveroo the means to carry on and now pursue an IPO.
As the company opened up its books ahead of the listing, it revealed losses of £233.7m in 2020, a decrease on the losses of 2019, while the volume of transactions it processed in 2020 was £4.1bn, up from £2.5bn.
It raised a further $180m from investors in January.
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