Deliveroo’s valuation soared to more than $ 7 billion in a new fundraiser, a sign of rising confidence among investors in the food delivery app ahead of its long-awaited debut on the stock market.
New private funding from one of London’s largest internet groups is the latest illustration of the frenzied investor appetite for high-growth companies, even as some analysts warn that technology assessments overwhelmed.
This suggests that Deliveroo’s backers believe its valuation may exceed $ 7 billion in an initial public offering, which the company has for the first time publicly confirmed is ongoing, after a hit list since the DoorDash US delivery app last month.
Deliveroo said on Sunday it had raised $ 180 million in new funds from existing investors, led by Durable Capital Partners and Fidelity Management, valuing the eight-year company at more than $ 7 billion, not including the new funds raised. That’s almost double its 2019 price, which would be between $ 3-4 billion, when Deliveroo raised $ 575 million investors, including Amazon.
Amazon funding only closed August last year, after an investigation by the UK competition regulator. Deliveroo was forced to take out a short-term loan of £ 198million in 2019, when losses increased by a third to £ 317.7m.
Since then, pandemic lockdowns have supercharged food delivery online business, which more than doubled Deliveroo’s revenues in the UK and Ireland and pushed it towards operational profitability in the second and third quarters of last year.
Will Shu, co-founder and managing director of Deliveroo, said the funding “would help us continue to innovate” in areas such as grocery delivery and its Editions network of “ghost kitchens”, which enable restaurants to ” extend delivery coverage without providing food internally. “We are truly delighted that our shareholders see the opportunity and growth potential that lie ahead,” said Mr. Shu.
Durable Capital, based in the affluent town of Chevy Chase, Maryland, is also an investor in DoorDash and To affirm, two of the hottest tech IPOs in recent weeks, according to PitchBook, which follows private investment.
“I was impressed with the [Deliveroo] the team’s ability to spot opportunities, innovate and adapt to market changes, ”said Henry Ellenbogen, Managing Partner and Chief Investment Officer at Durable Capital. “The online food delivery market is nascent and under-penetrated. We believe that Deliveroo has the potential to grow into a much bigger business over time. “
Deliveroo has yet to say whether its listing, which could take place as early as April, will take place in London or New York, amid fears that Brexit has notched the London IPO appeal.
Last month DoorDash saw its share price almost double on the first day of trading in New York. As DoorDash’s valuation surpassed $ 60 billion last week, its shares have been volatile, falling nearly 10% on Friday with no obvious catalyst.
The difficulty of pricing new lists of technologies has prompted some companies, particularly Roblox, to reconsider their IPO plans. However, European Internet groups, including Auto1, InPost and Moonpig have all indicated their intention to float in recent weeks.
Deliveroo’s new fundraiser presents itself renewed competition in its London backyard of Just Eat Takeaway.com, the largest online food delivery group in Europe. Jitse Groen, managing director of the food delivery group, said last week that he would “make life very, very, very complicated for competitors” in London by undercutting delivery prices and investing heavily. in a new messaging network.