Deliveroo backers serve up £5bn valuation ahead of London float

Deliveroo chief executive Will Shu

Credit: Deliveroo

Deliveroo has received a £130m cash injection which values the takeaway app at more than £5bn as it prepares to capitalise on its pandemic growth with a blockbuster stock market float.

The funding round, led by existing investors Durable Capital Partners and Fidelity, lifts the total private backing for Deliveroo to more than £1.2bn.

The company, led by co-founder Will Shu, said it will spend the cash developing more “dark kitchen” sites, which make meals for takeaway only, and expanding its “on demand” groceries business. It said the deal reflects its backers wish to stake more on the growth of the online takeaway market.

Deliveroo is targeting a stock market debut in April after lockdown demand helped it become profitable for the first time after years of heavy losses.

­Analysts have speculated that it could attract a debut valuation of £8bn, which would make it the biggest new listing in London for a decade. Mr Shu, a 41-year-old former investment banker from the United States, is due to become one of Britain’s richest entrepreneurs in the float.

Prior to the latest funding round he owned almost 6.8pc of Deliveroo, which at a valuation of £8bn would be worth £540m.

The float will cap a rollercoaster 12 months for Deliveroo, which was close to collapse last year after a competition investigation held up an investment from Amazon.

It has since enjoyed a surge in demand linked to the pandemic, which restored the company to profitability as locked-down consumers turned to takeaway delivery apps more than ever.

Henry Whorwood, of analyst firm Beauhurst, said: “Deliveroo’s current valuation would already be a decent return for their existing investors such as Accel and Index Ventures.

“An initial public offering could be much higher, possibly ten times its ­revenue, or nearly £8bn.”

The recent successful float of DoorDash, a US rival, led to a surge in its stock price that sent the company’s valuation to more than $60bn (£44bn), fanning optimism about the prospects for its British rival.

A virtual roadshow for Deliveroo’s float is due to start within weeks.