Deliveroo set for London stock market launch

Deliveroo debuts as a listed company Wednesday in London’s biggest stock market launch for a decade, after the app-driven meals delivery group enjoyed surging sales during the coronavirus pandemic.

The eight-year-old British company, facing criticism over its treatment of self-employed riders, is set for a value of £7.6 billion (8.9 billion euros or $10.5 billion) when it launches at 0700 GMT.

This is after pricing its initial public offering at £3.90 per share — the bottom of its target range — according to a source close to the matter.

Despite “very significant demand from institutions across the globe” amid market volatility according to Deliveroo, its IPO has been snubbed by some asset management firms, citing the job insecurity of riders.

Amazon-backed Deliveroo maintains that its riders — which total around 100,000 across 800 cities worldwide — value the flexibility the job affords.

However, its business model has come under scrutiny, including in Britain, France and Spain.

And the highly anticipated float has been overshadowed by small-scale protests, strikes and rallies in Australia, Britain and France — with more set to follow.

London boost

Deliveroo’s listing is seen as a major boost to London’s financial sector, known as the City, which earlier this year lost its European share trading crown to Amsterdam following Brexit.

The stock market float is set to be London’s largest since Swiss miner Glencore’s IPO in 2011 valued at almost £37 billion.

Institutional investors are the first to get a slice of the group, followed by the general public on April 7.

Deliveroo is selling around £1.0 billion worth of new shares, while current investors in the company plan to also sell part of their holdings.

Deliveroo has said that about £50 million of its stock will be made available for customers, with delivery riders and restaurant partners also able to participate.

The company is adopting a dual class share structure, giving founder Will Shu 20 votes per share while all other shareholders get one vote per share.

Britain’s antitrust regulator last year approved Amazon’s 16-percent investment in Deliveroo after an in-depth probe concluded it would not harm competition.

Last year, more than six million people ordered food and drink every month via Deliveroo’s app from 115,000 cafes, restaurants and stores.

But it still ended up with a hefty loss owing to rising costs.

Pressure has meanwhile intensified on the wider “gig” economy to improve staff conditions after Uber earlier this month granted its UK drivers worker status, with benefits including a minimum wage.

A world first for the US ride-hailing giant, Uber moved after Britain’s Supreme Court ruled that its drivers were entitled to worker’s rights.

— AFP