Deliveroo: an incredible ride to IPO

Deliveroo is reported to target a $10bn valuation in an upcoming London IPO. In preparation for a much anticipated listing, Dealroom and Flow Partners (a UK-based corporate finance boutique) have looked at Deliveroo’s 9 year ride to (potential) decacorn status.

Last week we published a first draft using pre-prospectus publicly available data. It prompted some lively discussion and useful feedback from a number of investors and analysts as well as Just Eat Takeaway CEO (and Takeaway.com founder) Jitse Groen, which we’ve incorporated into this final report.

Delivery fee would likely be in net revenue. Given those are higher in the UK I would assume your calculated GTV and therefore also GMV would be lower. Your guess is as good as mine though.

— Jitse Groen (@jitsegroen) March 8, 2021

Pandemic-fuelled delivery boom

One of the first tech trends projected for the pandemic was an acceleration of food delivery. Indeed in the UK, delivery transaction numbers were up 65% in the first 9 months of 2020, compared to +25% for full year 2019. Deliveroo increased its UK market share in the process, from 16% to 20%.

Benchmarking multiples

Deliveroo is now approaching “adjusted EBITDA” profitability. Targeting going public at a $10B / £7.5B valuation would give them an EV / Revenue multiple of estimated 4.5x.

Bang for buck

Deliveroo commands the highest average order value in UK food delivery, which also increased across the board during the pandemic.

Market landscape

Meal delivery markets are each dominated by a small number of young players.

Takeaway delivery is just part of the opportunity

Though Covid accelerated meal delivery, it remains a small part of the overall restaurant opportunity, which itself pales in comparison to grocery delivery. The instant grocery market is hotting up, with startups like Dija, Gorillas and Getir all making dedicated plays for the space, and Deliveroo has already partnered with multiple UK supermarkets to provide real-time delivery from stores and micro-fulfilment centres.

An incredible ride to IPO

On their nine year journey, Deliveroo has been one of the fastest-growing tech companies in Europe, an incredible ride for the founders and investors alike.

See Deliveroo profile on Dealroom