Deliveroo 'appoints bankers' for London listing

·2 min read
A Deliveroo courier cyclist waits at traffic lights on a near-deserted Tottenham Court Road in London, England, on March 21, 2020. Much of central London was virtually empty today, a day after British Prime Minister Boris Johnson ordered the closure of all pubs, bars, cafes and restaurants around the country. The move represents a toughening of measures to enforce the 'social distancing' that is being urged on citizens to reduce the growth of covid-19 coronavirus infections. Nightclubs, theatres, cinemas, gyms and leisure centres were also ordered closed. Some shops in the centre of capital remained open today, albeit mostly deserted of customers; many retailers however have temporarily closed their doors until the crisis abates. (Photo by David Cliff/NurPhoto via Getty Images)
Food delivery services have been among the winners of the coronavirus lockdown, as large swathes of the economy ground to a halt. Photo: David Cliff/NurPhoto via Getty Images

Deliveroo is in the process of formalising plans for its London initial public offering (IPO), and has appointed investment bankers to underwrite it.

Goldman Sachs (GS) has taken up the challenge, according to reports by Sky News this morning. The float could raise more than £2bn ($2.6bn), and would take place in 2021.

Other banks are expected to be appointed in the coming months, the report said.

Rumours of listing talks were circulating in the last week of September, as Bloomberg reported people familiar with the matter had said discussions were in their preliminary stages.

Food delivery services have been among the winners of the coronavirus lockdown, as large swathes of the economy ground to a halt.

Although Deliveroo initially struggled under lockdown, it was boosted as the year went on, as customers avoided supermarkets, instead opting to order in food and groceries.

In August, investment from Amazon (AMZN) was cleared by regulators after a competition probe that lasted almost a year. It froze the majority of Amazon’s cash injection.

The CMA said in a statement on Friday 17 April that the decision was made “in light of a deterioration in Deliveroo’s financial position as a result of coronavirus (COVID-19).”

While the extent of Amazon’s stake has not been publicly disclosed, it was the lead investor in a $575m funding round announced by Deliveroo in May last year.

Investors in the company include T Rowe Price (TROW), Fidelity Management and Greenoaks Capital.

A spokesperson for Deliveroo declined to comment on the appointment.

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The company was valued at more than $2bn about three years ago but hasn’t been forthcoming with an estimate since. Deliveroo has previously said that sales from the food-delivery business grew 72% in 2017, reaching £476m for the year.

Since 2013 the business has grown, competing with other services Uber Eats and Just Eat Takeaway (T5W.F) for market share.

These companies have been expanding into grocery delivery, as Deliveroo partnered with Waitrose to offer quick deliveries of goods.

The company is gearing up to offer a new range of features, including tipping riders. It also said last week that it would add 15,000 riders to its fleet by the end of year.