Deliveroo targets value of up to £8.8bn in IPO

Deliveroo is seeking a market value of up to £8.8bn at its initial public offering in what could be London's biggest IPO in a decade.

The food delivery company set its offer price range at between £3.90 and £4.60 per share, implying a market capitalisation of £7.6bn to £8.8bn - higher than expected.

The sale of 384.6m shares will comprise £1bn of new shares and shares held by existing investors. At the top of the price range the IPO would be the biggest since Glencore's in May 2011, Reuters said.

Deliveroo will also be London's biggest technology-related IPO, beating the £5.4bn market value achieved by The Hut Group in 2020. The company is taking advantage of proposed new listing rules allowing founder Will Shu to have extra voting rights for three years.

The company's listing is viewed as a step in the right direction for London in a bid to attract more technology companies, whose founders often retain large stakes and want to direct the business in its early years as a public company.

Chancellor Rishi Sunak has welcomed Deliveroo's decision to list in London despite questions about the company's treatment of workers.

In a brief trading update, Deliveroo said that the total gross transaction value on its platform rose 121% in January and February from a year earlier.

“We have seen a strong start to 2021 and we are only at the start of an exciting journey in a large, fast-growing online food delivery market, with a huge opportunity ahead,” Shu said.