Deliveroo – the UK-based food delivery company worth $4B has appointed Goldman Sachs and JPMorgan to manage an initial public offering (IPO) in the first half of 2021, according to a person familiar with the process.
Deliveroo has chosen London for its highly anticipated IPO after Rishi Sunak, the UK chancellor, approved the listing rules to allow founders to retain more control after going public.
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What is an IPO and how it works
IPO is a process of offering shares of a private corporation to the public in a new stock issuance. Why go public? The primary benefit of going public is easier access to capital.
To go public, a company must have a track record of growth and other favorable results and hire an investment bank (Goldman Sachs and JPMorgan in Deliveroo case) to come in and underwrite the IPO. The underwriters also performed due diligence and verified financial information and business model.
Once the paperwork done, the company sells the stock to institutional investors. When the initial block of shares has been sold, the company sets an initial price and date for the stock to begin trading on a stock exchange.
Financial Indicators before Deliveroo IPO
Deliveroo was founded in 2013 by current CEO William Shu and Greg Orlowski.
Deliveroo operates in 200 cities in 12 countries as an online food delivery platform that integrates with existing restaurant point-of-sale infrastructure. The company has raised over $1.5 billion in Venture Capital funding from investors including Amazon.com, Colt Ventures, T. Rowe Price, Vis Capital, General Catalyst, GR Capital, DST Global, Greenoaks Capital Partners, Accel, Hummingbird Ventures, Hoxton Ventures, and Index Ventures. Per company press releases, Deliveroo last raised $575 million in May 2019 at a post-money valuation of $4 billion.
In 2016, Deliveroo's revenue skyrocketed by 600% to reach $173M, while in 2017 it added 116% more and amounted to 350M, and in 2019, it rose by 72% and reached $646M.
In September 2017, Deliveroo was worth $2B after raising $385M with venture funding. This was Deliveroo's largest investment to date since the company's inception. According to Crunchbase, a total of $860M was raised in eight rounds of funding. In April 2020, the UK Competition and Markets Authority pre-approved another $575M investment coming from Amazon.
Some analysts believe the company's value is unchanged since 2017, while Deliveroo itself claims it is now worth $4B.
- Earnings as of Dec 31,2020: £1 190,8M
- EBIT as of Dec 31, 2020: -£221,1M
- Net profit as of Dec 31, 2020: -£223,7M
- Net debt as of Dec 31, 2020: £343,1M
How to Buy Deliveroo Stocks Before the IPO (Offering Price)
In the past, IPOs as highly profitable investments were available only to the privileged customers of the leading brokerage firms and it was challenging for retail investors to gain access. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market at whatever stock price supply and demand allows.
Technologies and marketplaces changed the rules of the game, now regular investors can get pre-IPO shares. To participate in Deliveroo IPO you need to use an IPO investing app like Freedom Finance (NASDAQ: FRHC), TD Ameritrade or Fidelity. They give its customers access to IPOs and secondary offerings through their existing brokerage account. Also you can buy Deliveroo shares when the company goes public via a commission-free trading app like eToro.
Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.
🚨 Detailed Instructions How to Participate in the Deliveroo IPO before public trading:
Below we share the instruction how to participate in the approaching Deliveroo IPO using Freedom Finance (Tradernet platform). This marketplace is chosen as an example because Deliveroo is already listed there and available for participation now.
* Freedom Finance services are NOT available to US citizens and residents.
- Apply for a Freedom Finance account — you need to prepare your identity document and a document confirming the address of residence (utility bill). The verification process is very fast, it will take 2 minutes to create your account.
- Deposit your account — to participate in an IPO, your account must have available funds in the amount you send IPO application for.
- 💡 Tip: It's recommended to deposit your account in advance. Often the exact IPO date is undefined until the last day. You may have a short notice for participation and account deposits also takes time for processing. Also, sometimes Freedom sends last-minute IPO offer when you have 2 hours to participate.
- Wait for a request to participate in the IPO — when Deliveroo IPO date is defined you will get a notification (email and SMS text message) from Freedom Finance to apply for the IPO.
- Submit a request to participate in the IPO — when you get a notification that you can apply to buy shares, go to IPO section of the platform > you will see the IPO listing with the share price set by the underwriter > click Participate in the IPO > input the amount you want to invest > Send your application. Note: Before the book closing, a request can be withdrawn. At the time of the book closing, 1 day before the start of the exchange trading, the specified amount will be blocked on the account.
- Wait for allocation — The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
- Start of trading — With the beginning of the public trading on the stock exchange, the purchased shares will appear on the account and a lock-up period will start— a 93-day period of prohibition on sale. You can’t sell stocks, but you can track their current value and growth indicators in your personal member area and a trading terminal.
- Closing your trade — At the end of the 93 days lock-up period, you will be able to manage your stocks at your discretion — leave in the portfolio or sell and withdraw money or transfer the stocks to another depository/ broker in your name. This can be done in your account by clicking the ‘Sell’ button next to the name of the security. In this case, a commission of 0.5% of the amount of the sale transaction is charged.
Is investing in IPOs profitable?
Not always. The average return at the end of the lock-up period is 52%, past IPOs data.
When is the Deliveroo IPO date
March 31, 2021
What is Deliveroo IPO price range?
£3,9-4,6 per share.
How to Invest in Deliveroo after the IPO date (opening price)?
In what currency Deliveroo IPO and post-IPO shares will be traded?
The Deliveroo IPO and stock trading currency will be GBP.
If you have funds in another currency the cheapest way to convert your currency is to use the mid-market rate (that’s the one you’ll find on Google) which can be done via a fintech service like Wise. Banks may add hidden markups to their exchange rates - charging you more without your knowledge. And if they have a fee, they charge you twice. Wise never hides fees in the exchange rate.
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What is the Deliveroo ticker (stock symbol)
Deliveroo IPO news
- Mar 4, 2021 – Deliveroo has chosen London for its highly anticipated IPO after Rishi Sunak, the UK chancellor, approved the listing rules to allow founders to retain more control after going public.