London wins one of Europe’s most hotly anticipated IPOs: Amazon-backed Deliveroo

March 4, 2021, 12:07 PM UTC

Deliveroo, the Amazon-backed delivery company which has grown into a household name during the COVID-19 lockdowns, has picked the London Stock Exchange as the destination for its planned $7 billion IPO.

Deliveroo, which reported a £223.7 million ($309 million) loss last year, operates in a dozen markets, including six in the eurozone where competition is fierce for “to your door” food-delivery services.

The London listing will take the form of a dual structure in the first three years before reverting to a traditional structure, giving Deliveroo CEO William Shu the ability to make company decisions easily in the initial period.

“Deliveroo was born in London. This is where I founded the company and delivered our first order. London is a great place to live, work, do business, and eat. That’s why I’m so proud and excited about a potential listing here,” Shu said in a company statement.

The dual-structure IPO will create two separate classes of shares with different voting rights, commonplace in exchanges in the U.S., Hong Kong, and the EU, but less so in the U.K. In the first three years, Deliveroo will not be eligible for inclusion in FTSE indexes because of this structure.

Deliveroo’s announcement came a day after the U.K. released a review recommending looser listing rules as it looks to become Europe’s preferred destination for SPAC-related deals.

That review said dual-class shares provide a way for company founders “to continue to be able to execute their vision for how the company should evolve and grow while still allowing others to share in that growth.”

This year is already off to a very good start for U.K. listings. In the first two months of 2021, 11 listings on the London Stock Exchange have raised over £3.24 billion, the strongest start since the bumper year in 2006.

The bootmaker Dr. Martens was listed on the London Stock Exchange at the end of January. Riding on its popularity as cult footwear, Dr. Martens raised £1.3 billion ($1.8 billion) in its IPO.

Correction and update, March 8, 2021: This post has been updated to include Deliveroo’s full-year 2020 operating results, which were disclosed in a March 8 regulatory filing.

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