Deliveroo seeks £8.8bn valuation at London float

British food delivery start-up will sell its shares at between £3.90 and £4.60

Deliveroo's chief executive Will Shu says he is 'proud' to be listing the company in London, where it was first set up. Courtesy Deliveroo

British food delivery start-up Deliveroo is seeking a valuation of £8.8 billion ($12.19bn) as it starts taking investor orders ahead of its flotation on the London Stock Exchange, the company said on Monday.

The takeaway delivery platform will sell its shares at a price between £3.90 and £4.60, putting its market capitalisation at £7.6bn to £8.8bn in what will be the UK’s largest initial public offering since September.

“We are proud to be listing in London, the city where Deliveroo started,” chief executive Will Shu said. "Becoming a public company will enable us to continue to invest in innovation, developing new tech tools to support restaurants and grocers, providing riders with more work and extending choice for consumers.”

Deliveroo revealed its London listing earlier the month in a move prompted by the UK's planned overhaul of listings in a post-Brexit shake-up.

Deliveroo is listing with two classes of shares, which will give Mr Shu outsized voting rights for three years, with its IPO coming at a time of soaring demand for its service.

The company said the value of its orders in January and February was up 121 per cent on 2020, driven by a surge in demand in the UK and Ireland during coronavirus lockdowns.

The listing, expected in April, will offer a much-needed boost for London’s financial sector, which was hit hard by Britain’s exit from the European Union.

About $6bn in European share trading left the City for the continent on January 1 – the first business day after the transition period ended.

However, about £4.8bn has been raised in the UK through IPOs this year, Bloomberg said, in what could be the busiest-ever first quarter for listings in the City.

About 384 million shares will be sold in the Deliveroo IPO, which is worth £1.6bn at the midpoint of the price range, making it the largest float on the LSE since THG’s £1.88bn offering in September.

Deliveroo will take investor orders until March 30, with the stock set to start trading a day after. About £1bn of the money raised is earmarked for the company itself with the rest going to existing investors who are selling shares.

Since its London launch in 2013, Deliveroo has expanded into mainland Europe, Asia, Australia and the Middle East.

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