Deliveroo has appointed Goldman Sachs to oversee its long-awaited London flotation, according to reports, in a move that would value the UK food delivery company at more than £2bn.
The Amazon-backed startup is expected to debut on the London stock market next year following discussions with the investment banking firm, Sky News reported.
Deliveroo declined City A.M’s requests to comment on Goldman’s appointment, and it is understood that there is no definitive timetable for a public listing.
However, further banks are expected to join discussions in the coming months.
It comes as the food delivery giant saw sales rocket during the pandemic, as a nationwide lockdown and social distancing measures forced customers to eat from home.
Deliveroo, founded by Will Shu in 2013, swung to a profit earlier this year just months after warning the UK’s competition regulator it could go bankrupt.
During both May and June, Deliveroo had “both been profitable and had a positive cash flow” following a “significant increase” in order volumes during the pandemic, the Competition and Markets Authority (CMA) said.
The nationwide lockdown came as a welcome boost for the food delivery company, after it last year struggled to turn a profit. Last September, Deliveroo said losses had deepened from £199m to £232m in 2018.
In June, the CMA gave Amazon the green light to pump £442m into the food delivery company, after Deliveroo warned the watchdog that the “impact of the coronavirus pandemic on its business meant that it would fail financially and exit the market without the Amazon investment”.
The CMA’s ruling that Amazon’s 16 per cent stake in the firm was “not likely to result in a substantial lessening of competition” laid the ground for further innovation for the delivery giant.
The company jumped on Rishi Sunak’s plans to boost the UK’s V-shaped economic recovery, rolling out £5 discounts for customers as part of its Eat In to Help Out offer across August and September.
Deliveroo now has an estimated 44,000 restaurants and 16 grocery partnerships on its platform in the UK, including supermarket giants Waitrose, Morrison’s Aldi and the Coop.
The group last week announced it is preparing to add an extra 15,000 riders to its fleet by the end of the year to meet fresh partnerships and a surge in demand.