Food delivery start-up Deliveroo has today confirmed its £8bn ($11bn) stock market floatation in London, something which was on the cards previously.
The eight-year-old company will use the “dual-class” innovation which has been introduced to the London Stock Exchange by the UK government in a bid to keep UK companies from being lured over to the NASDAQ, as well as attract continental European listings.
The listing will be on the London Stock Exchange’s “premium” segment. Dual-class shares are popular in the US – where it is used by companies such as Facebook and Alphabet – because it allows founders to take a longer view of strategy and retain more control of their companies during decisions such as mergers and acquisitions.
Will Shu, CEO of Deliveroo, said in a statement: “Deliveroo was born in London. This is where I founded the company and delivered our first order. London is a great place to live, work, do business and eat. That’s why I’m so proud and excited about a potential listing here.”
Deliveroo’s business has boomed during pandemic-related lockdowns – it posted six-months of consecutive profits throughout this period – and now plans to expand.
Although Deliveroo’s listing came comes just a day after the British government gave the green light to recommendations for the dual-class shares, Deliveroo’s listing was always expected to be in London, given it’s UK base, so this news looks to have a political tinge attached to it. Indeed, the press release was handily issued with a supportive statement from the Chancellor of the Exchequer.
Claudia Arney, Chair of Deliveroo, said: “The time-limited dual-class structure would provide Will and his team with the certainty needed to execute against their ambitious growth plan to become the definitive online food company.”
Deliveroo’s plans include expanding its ‘ghost’ kitchens; on-demand grocery; extending its Plus subscription service; and offering its Signature service to restaurants, which allows customers to order delivery via a restaurants’ own website.
The multibillion-pound IPO will be a shot in the arm for The City after Amsterdam overtook London as Europe’s largest share trading center in January, post-Brexit.
Deliveroo pegged a $7 billion valuation in January after raising $180 million from investors.