LONDON — British food delivery start-up Deliveroo announced Thursday that it plans to list in London, in a post-Brexit boost for the City.
The firm, which is backed by Amazon, is expected to go public later this year. It went from near failure in 2020 amid a competition review into Amazon’s minority investment, to operating profitability toward the end of the year thanks to the coronavirus lockdown-driven surge in demand for online takeout services. Amazon’s stake in Deliveroo was greenlit by the regulator last summer.
Deliveroo said it would adopt a dual-class share structure for its market debut, giving its founder and CEO Will Shu enhanced voting rights and therefore more control over the direction of the company. It comes after a government-backed review called for reforms to London’s listing regime, including the ability to list dual-class shares which were pioneered by Google and Facebook.
In Deliveroo’s case, the dual-class structure will be limited to three years followed by a shift to a traditional single-class share structure, in line with the recent recommendations.
“Deliveroo was born in London,” Shu said in a statement Thursday. “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.”
The news is a boon to London’s stock market, which is looking to attract more high-growth tech firms to compete with New York and the European Union, following Britain’s withdrawal from the bloc. Amsterdam last month overtook London as the biggest share trading capital in Europe.
“The U.K. is one of the best places in the world to start, grow and list a business — and we’re determined to build on this reputation now we’ve left the EU,” said British Finance Minister Rishi Sunak. “That’s why we are looking at reforms to encourage even more high growth, dynamic businesses to list in the U.K.”
“Deliveroo has created thousands of jobs and is a true British tech success story,” Sunak added. “It is great news that the next stage of their growth will be on the public markets in the U.K.”
Deliveroo hasn’t yet disclosed pricing information for its initial public offering. It recently raised $180 million in fresh funding at a $7 billion valuation. Alongside Amazon, Deliveroo is also backed by Durable Capital Partners, Fidelity, T. Rowe Price, General Catalyst, Index Ventures and Accel.
“This is an important boost for U.K. tech,” said Stephen Kelly, the chair of lobbying group Tech Nation. “With seven new unicorns created in 2020 alone, the U.K. now has a total of 80 scaleups valued at more than £1 billion.
“That is more than twice as many unicorns as Germany and France,” Kelly added. “We expect to see more of our home-grown success stories following suit in what is just the start of a golden age for U.K. tech.”
Several other firms are rumored to be exploring London listings, including fintech start-up Wise and cybersecurity company Darktrace. On Monday, Danish reviews website Trustpilot announced it said it was considering launching an IPO in London.
Source: Finance - cnbc.com
