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Deliveroo has secured an additional $ 180million (£ 132million) in funding from shareholders, including Amazon, in a measure that values the take-out company at over $ 7 billion as it is preparing for a successful listing on the stock exchange.
Will Shu, founder and CEO of Deliveroo, said the London-based company would use new cash from existing investors to improve the business of “consumers, cyclists and restaurants”, as he first confirmed. that the company was working on plans for an initial public offering (IPO).
Deliveroo is among the internet companies to benefit from the big pandemic-related changes in consumer spending, and the company said the new round of investor funding has valued the company at “over $ 7 billion.”
A successful IPO would complete the company’s recovery after the initial shock caused by the pandemic.
Last April, the Autorité de la concurrence et des marchés (CMA) signaled to Amazon the purchase of a 16% stake in Deliveroo after the take-out delivery service warned it could be collapse after restaurants closed in the first lockdown resulting in “significant drop in income.”
The money is being spent on “new technological tools to support restaurants, provide more work for customers and expand customer choice,” said Shu, a former investment banker who started the business from his London apartment. in 2013. “We are really delighted that our shareholders see the opportunity and growth potential that lie ahead. “
The company plans to expand its network of kitchen-only delivery sites – called “dark kitchens” – grocery delivery and subscription services, as well as allow more restaurants to take orders through their own sites. Web.
Urban investors are eager to invest their money in internet companies – such as The Hut Group, which opened in September – which are seeing big increases in online spending. This appetite has encouraged other online companies, including greeting card and gift retailer Moonpig, to announce their intention to sell stock.
Last week, Deliveroo’s rival Just Eat said UK orders jumped 400% in the last three months of 2020, with coronavirus restrictions keeping people at home.
Speaking in December, Shu said Covid-19 accelerated consumer adoption of food delivery services by around two to three years, with order volumes in the UK and Ireland currently doubling in 2019. “We have shown that our model is profitable,” he said, adding that the previously loss-making company has been “operationally profitable for over six months now”.
Shu added that the company has seen an “incredible increase in the number of new customers joining the platform.” “We’ve also seen our existing customers look to order more often, also order more frequently for family, we’ve seen the average basket size increase and order a wider product line.”
In 2019, the CMA launched an in-depth investigation into Amazon’s investment in the business which it said risked leaving customers, restaurants, and grocers with higher prices and lower-quality services. . Deliveroo did not indicate the contribution of each investor in the last funding round, but Amazon’s participation did not increase accordingly.
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