Mar 5, 2021
The online food delivery company, backed by Amazon, announced this week its plans to list on the London Stock Exchange. Deliveroo was founded by William Shu and Greg Orlowski in 2013. The idea for the company was birthed out of Shu’s frustrations over lack of options for lunch while he was working as a bank analyst.
Today the company operates in over 500 towns and cities across 12 markets, including Australia, Belgium, France, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, United Arab Emirates, Kuwait, and the UK. It has over 2,000 employees worldwide.
Over 46,000 restaurants joined Deliveroo in 2020, aggregating the total number of restaurants that the company works with to 140,000.
In 2020 the company was valued at $7 billion by Amazon, one of its backers. However, a Financial Times article reveals that Deliveroo set its sights on a $10 billion IPO.
“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.” Shu said on Thursday.
Claudia Arney, Chair of Deliveroo, added that “Deliveroo is proud to be a British company, and the selection of London as its home for any future listing reflects Deliveroo’s continued commitment to the UK. London is not just where Deliveroo was born; it is one of the leading capital markets in the world, with an incredible technology ecosystem, sophisticated investment community, and a skilled talent pool. 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. We welcomed Lord Hill’s recommendations to support the modernization of the market and continued tech sector growth in the UK.”
The announcement comes in after the publishing of Lord Hill’s UK Listing Review, which proposes changing how companies are listed in the UK. As things stand at the moment, companies who wish to list on the ‘premium’ portion of the LSE (London Stock Exchange) cannot do so if they have a dual-class share structure.
Many companies around the world use a dual-class share structure as it enables founders to retain more voting rights and greater control of their business after the listing. Lord Hill recommends allowing a dual-class share structure for the ‘premium’ portion of the LSE; however, the recommendation would have to be approved by the FCA (Financial Conduct Authority) first. The UK government is pushing this structure in an attempt to prevent UK companies from taking their IPOs to Nasdaq and to attract more European listings.
The UK Listing Review has published a report setting out its recommendations to reform the UK's listing regime. The recommendations in the review are aimed at making it easier to list and fundraise on the #LondonStockExchange. Click here: https://t.co/yhbFbGK6pU #RPCBigDeal pic.twitter.com/9F14PRZO7u
— RPCLaw (@RPCLaw) March 4, 2021
Deliveroo’s dual-class share is set to tightly align with Lord Hill’s recommendation for the time being. The company will adopt a time-limited dual-class share structure for three years and then revert to the traditional one-class shares.