Deliveroo says it has raised $180M in new funding from existing investors led by Durable Capital Partners and Fidelity Management at a $7B+ valuation
Deliveroo says it has raised $180M in new funding from existing investors led by Durable Capital Partners and Fidelity Management at a $7B+ valuation — Private financing boost for food delivery app ahead of long-awaited stock market debut — Deliveroo’s valuation shot up to more than $7bn.
It is estimated that Deliveroo is worth more than $7 billion based on the latest fundraising
Boost in private financing ahead of long-awaited debut on the stock market for food delivery app
During a new fundraising campaign by Deliveroo, the company’s valuation rose from around $7bn to almost $9bn, signaling that the company’s investors are becoming more confident ahead of the app’s long-awaited IPO.
There is a new round of private funding announced for one of London’s most prominent internet groups, and it represents the latest example of the frenzied appetite of investors for high-growth companies, even when some analysts warn that the valuations of some tech firms are becoming overinflated.
In an initial public offering, Deliveroo’s backers claim its valuation would exceed $7 billion. The company confirmed publicly last month that an initial public offering is coming and it has since confirmed a blockbuster listing by DoorDash, another delivery app based in the US.
During the early hours of Sunday morning, Deliveroo announced it was raising $180 million from existing investors, including Durable Capital Partners and Fidelity Management, which will help value the eight-year-old company at more than $7bn, even without including the new funding. According to reports, Deliveroo’s 2019 price tag was between $3-$4 billion when it raised $575 million from investors including Amazon, which is almost double its 2019 price tag.
As a result of an investigation by the UK’s Competition and Markets Authority last August, Amazon’s funding was not closed until August last year. As Deliveroo’s losses grew by a third to £317.7 million in 2019, the delivery service had to take out a short-term loan of £198 million.
During the second and third quarters of last year, Deliveroo achieved operating profitability before the pandemic lockdowns triggered by the EV-DEC were lifted. Since then, Deliveroo has more than doubled its revenues in the UK and Ireland and has driven it to operating profitability.
Deliveroo’s co-founder and chief executive officer Will Shu said he was pleased to receive the funding, which would allow Deliveroo to “continue to innovate” in areas such as grocery delivery and its Editions network of “ghost kitchens”, which allows restaurants to provide delivery services without offering on-site dining. We are very pleased that our shareholders believe there is an opportunity and potential for growth ahead of us, said Mr Shu.
According to PitchBook’s online platform for tracking private investments, Durable Capital, a firm that is headquartered in Chevy Chase, Maryland, is also an investor in DoorDash and Affirm, two of the hottest IPOs in the tech sector in recent weeks, according to the online platform.
Henry Ellenbogen, managing partner and chief investment officer at Durable Capital, commented, “I am impressed with the [Deliveroo] team’s ability to identify and exploit market opportunities, innovate and adapt to changes in the market,” in an interview with Business Insider. Despite the fact that the online food delivery market is nascent and underpenetrated, it has great potential. As a company, Deliveroo has the potential to grow into one of the most significant companies in the world over the next few years.”
Despite concerns that Brexit has tarnished London’s reputation as an IPO destination, the delivery service has not yet indicated whether it intends to list in London or New York at the end of this year, which could happen as early as April.
The share price of DoorDash almost doubled on its first day of trading in New York last month after the company went public. Despite DoorDash’s valuation rising above $60 billion last week, its shares have been volatile over the past few days, falling by almost 10 per cent on Friday without any clear catalyst to explain why.
As a result of the difficulty in pricing new technology listings on the public markets, some companies, including Roblox, have decided to reconsider their IPO plans. Recently, however, several European internet groups have indicated their intention to flotation, including Auto1, InPost, and Moonpig, which are all listed on the stock exchange.