Strongly growing, but loss-making Deliveroo kicks off an IPO

British restaurant food courier Deliveroo is launching its IPO. The new annual report is intended to delight candidate shareholders: the company grew by more than 50 percent last year. But it still makes a loss.

This is expected to happen in April. According to the Anglo-Saxon media, the company is aiming for a valuation of more than 8 billion euros (7 billion pounds).

223.7 million

Net Loss

Deliveroo’s net loss decreased from £ 317.3m in 2019 to £ 223.7m last year.

CEO Will Shu, who founded the company in 2013, is in control. There will be two types of shares. The first gives shareholders one vote per share at the shareholders meeting? The second – exclusively for Shu – has twenty voices. In this way he wants to guarantee continuity after the IPO. Three years after listing, his shares will change to ‘ordinary’ shares.


In recent years, Shu has given part of the control over to early investors, including the Hummingbird fund of the Belgian Barend Van den Brande. Whether he will hold or sell his shares on the IPO is unknown.

To encourage new investors to buy shares, Deliveroo presents its figures for the 2020 fiscal year, which was a record year. Due to the corona virus, the catering industry was closed in many countries, but many restaurants kept their kitchens open to get food to their customers via courier services such as Deliveroo, Uber Eats and Just Eat

The 6 million Deliveroo users in twelve countries ordered dishes for 4.1 billion pounds in 2020. That is 64.3 percent more than in 2019. The majority ended up in the cash registers of the 115,000 restaurateurs who work with Deliveroo.

The tech company deducts a commission from what customers pay through its platform. That delivered Deliveroo 1.2 billion pounds in sales, 54 percent more than in 2019.

Nutrition for critics

Still, Deliveroo was unable to convert the strong sales growth into profit. Critics even wonder whether the company will ever be profitable on a sustainable basis. The losses did shrink. The net loss of £ 317.3 million for 2019 fell to £ 223.7 million last year. Gross operating loss (EBITDA) shrank from £ 231 million to £ 9.6 million.

1.2 billion


Deliveroo sales rose 54 percent last year to 1.2 billion pounds.

The losses can be partly explained because Deliveroo is a growth company and has to invest in marketing and technology, among other things. The gross result is positive. Gross profit rose 89 percent to £ 357.5 million.

In the coming years it should become clear whether Deliveroo can make a sustainable profit. That will be challenging. The competition with Uber Eats and Just Eat is tough. According to many observers – including CEO Jitse Groen – there is only room for one or two financially healthy meal suppliers in a country.


If the IPO goes ahead, Deliveroo will distribute £ 16 million among its couriers. 36,000 couriers will receive an average of 440 pounds.

In addition, Deliveroo’s business model is under pressure in several countries. Unlike, but just like Uber Eats, Deliveroo’s couriers are self-employed. They do not have a fixed salary and do not enjoy social security. In the Netherlands, Deliveroo got the lid on the nose of the judge on appeal three weeks ago. He ruled that Deliveroo couriers are not self-employed, but employees. In Belgium, a judge will rule this autumn on whether the couriers should be on the Deliveroo payroll.

Deliveroo is plagued by the perception that it does not treat its couriers fairly. The response to this is a financial reward if the IPO goes ahead. In that case, the company will distribute £ 16 million among its couriers. 36,000 couriers will receive an average of £ 440. The condition is that they have worked continuously for Deliveroo for the past year. Those who have been working for longer will receive more.

Belgian couriers also have a chance of winning a bonus. But not if they work for the platform according to the sharing economy system, as the majority of the 3,000 Belgian couriers do. “Only couriers with a self-employed status have a chance of a bonus,” says a spokesperson. “In Belgium, several hundred couriers receive a bonus.”

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