Internet startup Delivery Hero readies 450 mln euro IPO
FRANKFURT (Reuters) - Delivery Hero AG, one of Europe's largest internet startups, is seeking to raise around 450 million euros ($507 million) by listing shares on the Frankfurt Stock Exchange, the company said on Tuesday. The flotation of the food delivery company is expected to take place in the coming weeks. It will comprise newly issued shares from a capital increase and the sale of some existing shares from the holdings of current investors. The move could value loss-making Delivery Hero at between 3.5 and 4 billion euros, people close to the matter said last month. Approximately 35 percent of the share capital of Delivery Hero is currently indirectly held by Rocket Internet SE and approximately 10 percent is held by South African company Naspers. The company is targeting gross proceeds of about 450 million euros from newly issued shares, it said. It plans to use the money to fund further investments in its business and may step up marketing spending by 10-15 percent, a person close to the company said on condition of anonymity. The Berlin-based company founded in 2011 provides a digital platform for the delivery of meals from more than 150,000 restaurants. Some 90 percent of meals are delivered by the restaurants' own drivers, while the rest relies on Delivery Hero's network. Delivery Hero takes a commission of about 1.60 euros - or 10 or 11 percent on each average order - and slightly higher fees if it does the delivery itself. That compares to figures closer to 15 percent or above for peers such as Just Eat and Grubhub. Delivery Hero has not said when it will break even, but Chief Executive Niklas Ostberg has said the company was on track to improve profitability as it grows bigger. "Going public and listing our shares on the stock market will further enable us to develop the company and provide us with additional capital to expand our leadership positions in the online food ordering and delivery market," Ostberg said. The chief executive has also said in the past that acquisitions are an option. Roughly half of Delivery Hero's loss before interest, tax, depreciation and amortization of 116 million euros last year was due to ramp-up costs, including heavy marketing, for its Foodora unit which delivers from high-end restaurants. Big competitors have been raising capital or swapping assets to bulk up as Uber and Amazon push into meal delivery. Grubhub focuses on the U.S. market and European peers Just Eat and Takeaway each concentrate on a dozen or fewer countries, while Delivery Hero operates in more than 40 countries. Citigroup, Goldman Sachs International and Morgan Stanley will act as joint global coordinators and joint bookrunners, Delivery Hero said. UniCredit Bank AG, Berenberg, Jefferies and UBS Investment Bank have been mandated as additional joint bookrunners. (Reporting by Edward Taylor and Arno Schuetze; Editing by Tom Sims/Keith Weir)
