Deliveroo opens float talks after lockdown boom

Michael Cogley
·2-min read
The food delivery start-up turned in some profitable months as lockdown pushed more people to ordering take out - Telegraph/Telegraph
The food delivery start-up turned in some profitable months as lockdown pushed more people to ordering take out - Telegraph/Telegraph

British food-delivery start-up Deliveroo has opened talks around a potential float that could take place as early as next year, it has been reported.

The Amazon-backed firm has met with advisers that could potentially manage a listing in 2021, Bloomberg reported.

A final decision on a float has yet to be made and Deliveroo may decide against any such move. A spokesperson for Deliveroo said: "We don't comment on speculation."

Amazon’s investment in the food delivery firm was approved in August by the Competition and Markets Authority.

The US tech titan pumped $575m (£400m) of cash into the business to help it stay afloat after the watchdog the deal 15 months after it was first announced.

The CMA conducted a lengthy investigation into the deal and found that it would not substantially decrease competition in the market.

In the regulator’s final report, it also revealed that Amazon had originally viewed the deal as a “potential first step towards a full acquisition”.

The CMA insisted that any increase in Amazon’s stake in the firm would trigger another investigation.

As of August, Deliveroo had added an extra 11,500 new restaurants to its app as more began offering deliveries during lockdown.

Deliveroo swung to a profit earlier this year just months after it warned it could go bankrupt. A splurge on takeaways during lockdown helped the company to profitable months in May and June, according to the CMA report.

The company had repeatedly struggled to turn a profit for years, and last September said losses had deepened from £199m to £232m in 2018.

The business was valued at more than $2bn at its fundraise in 2017 but it provided no update on its valuation after Amazon declared its intention to invest. Amazon’s stipend brought the total amount of capital raised to over $1.5bn since it was founded in 2013.

In August, Waitrose struck a deal to sell groceries online through Deliveroo after the supermarket's deal with delivery site Ocado ended.

Waitrose’s tie-up with Deliveroo fuelled speculation that a further deal could be agreed down the line with Amazon.​