Deliveroo to raise £1bn in IPO giving early investors a 60,000% return on investment


Deliveroo is planning to raise £1 billion in new share sales as it prepares to launch what is expected to be London’s largest initial public offering (IPO) since 2013.

The delivery giant officially announced the funding target for its hotly anticipated IPO today, revealing that it planned to sell both new and existing shares when it goes public.

Deliveroo, which is now backed by retail giant Amazon, is expected to be valued at anywhere between £5 billion and £7 billion, marking the largest IPO on the London Stock Exchange (LSE) since Royal Mail went public eight years earlier.

According to a report from Sifted, this would see early investors achieve a whopping 60,000 per cent return on investment.

Founder Will Shu is understood to have launched a “family and friends” funding round when the company was starting out in 2013, raising just over £115,000.

READ MORE: Deliveroo picks London for hotly anticipated IPO as Sunak set to loosen listing rules

This gave Deliveroo a pre-money valuation of £1.5 million, and it is now worth around 4.666 times that amount.

While subsequent funding rounds mean their percentage will no longer be worth as much, Sifted estimates early investors who held on to their shares could see returns of more than 600 times their initial investment.

Deliveroo also confirmed that it will use a dual-class share system, which allows Shu to retain extra voting rights in order to protect the company from any hostile takeover.

Currently companies using a dual-class structure cannot list on the lucrative FTSE indices, but these rules could soon change under Chancellor Rishi Sunak.

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