During the coronavirus pandemic, there has been a general boom for food delivery services, with millions of homebound consumers spurring demand from the home delivery industry. According to reports, food delivery startup Deliveroo is exploring the possibility of an initial public offering (IPO) next year.
Amazon's 16% stake in Deliveroo approved
UK-based Deliveroo is in talks with potential consultants to open to the public in 2021, according to the latest news reported by Bloomberg, although sources familiar with the affair have reported that no final decisions have been made at the moment.
The company is supported by Amazon (Amazon shares - ticker: AMZN), which owns 16% of Deliveroo since the investment was approved by the UK's Competition and Markets Authority (CMA) in August.
The home delivery industry is expanding and Deliveroo's European rivals Just Eat Takeaway.com and Delivery Hero have both made major acquisitions this year. Deliveroo, which operates in over 200 cities in 12 countries, initially suffered at the start of the pandemic due to the closure of the same partner restaurants.
The CMA said that, in the initial phase of the pandemic, Deliveroo had the characteristics of a "company in bankruptcy", but Deliveroo's finances rebounded from April onwards, as the list of restaurants enrolled in the service moved from the large chains, many of which had closed, to smaller, independent restaurants, and the food delivery market as a whole has recovered.
“Both factors contributed to a rapid and significant turnaround in Deliveroo's financial position,” the CMA said, after clearing Amazon's 16% investment in August.
IPO in 2021?
After Deliveroo's 2017 fundraiser, its value was at least $ 2 billion, but no updated valuation of the company has been made following the $ 575 million investment led by Amazon and the subsequent lockdown boom.
The deal with Amazon, which began in May 2019, has come under scrutiny by regulators concerned that Amazon's stake in Deliveroo could harm competition by allowing Amazon to re-enter the online restaurant delivery market or by expanding its business. its presence in the delivery of food.
The pandemic also represented an opportunity for food delivery companies to expand into other home delivery sectors. British supermarkets, for example, which have long struggled for supremacy in the e-commerce space, have leaned on this sector to rapidly expand their home delivery services.
With the push due to the lockdown and the Amazon investment, Deliveroo could be preparing to launch an IPO on the stock exchange in 2021. How Amazon will react to such an event is not yet known.
The stake in the new publicly traded company could potentially benefit her, considering the positive trend of the food delivery sector and the fact that Deliveroo is apparently making a profit.
