Deliveroo kicks off £1.77 billion IPO, UK's largest in 2021

London

FOOD-delivery startup Deliveroo Holdings started taking investor orders in a share sale of as much as £1.77 billion (S$3.29 billion), marking the largest initial public offering (IPO) in the UK since September.

Deliveroo is selling shares at £3.90 to £4.60 apiece, said a statement Monday, valuing the company at £7.6 billion to £8.8 billion.

The offering is the biggest float on the London Stock Exchange (LSE) since THG's £1.88 billion offering in September, data compiled by Bloomberg showed.

The company will take investor orders until March 30, with the stock set to start trading a day after, said terms seen by Bloomberg.

The sale consists of as many as 384.6 million shares, and that amount could be increased by as much as 10 per cent if there is enough demand.

Besides the £1 billion of new shares the company aims to sell, existing shareholders will also offer stock in the IPO, Deliveroo said, without providing details. It plans to to invest its proceeds to fuel growth.

Deliveroo is coming to the market at a time when coronavirus restrictions have caused soaring demand for food delivery. Gross transaction value - the total value of purchases on its platform - rose 121 per cent in January and February versus the same period last year, the company said on Monday, after a 64 per cent increase in 2020.

"Bringing the food category online represents an enormous market opportunity," it said, adding that less than one of 21 meals a week - including breakfast, lunch, and dinner - takes place online now.

Its shareholders include Amazon, which holds a 16 per cent stake, venture capital firms DST Global and Index Ventures, who own about 10 per cent each, and US mutual fund company T Rowe Price Group with an 8.1 per cent interest.

Deliveroo is listing with two classes of shares, which will give chief executive officer Will Shu outsized voting rights for three years.

The offering comes after a government-backed report this month made a slew of recommendations to reform UK listing rules, including allowing such governance structures on the premium segment of the LSE, but it could be months before these are implemented.

The proposals are part of London's attempts to retain its clout as a major financial centre in a post-Brexit world and attract fast-growth technology companies to its stock exchange.

About £4.8 billion has been raised in the UK through IPOs in the first three months of the year, data compiled by Bloomberg showed, in what might end up as the busiest-ever first quarter for listings in the City. BLOOMBERG