Deliveroo’s filings show that it recorded an operating loss in the amount of PS223.7M during 2020. That’s a decrease by PS100M from the year before, and its gross transaction volume was PS4.1B up 64 percent YoY.
The clock is officially ticking for Deliveroo’s plans to launch an IPO in April. Following the announcement the previous week that it was planning to be listed on the London Stock Exchange, today the company that delivers food on demand supported by Amazon and other companies released an updated set of financials for its prior fiscal year, as well as its Expected intention to Float (EITF) — the more formal document that outlines the two weeks until the company releases its prospectus, and at the beginning of April, begins on its next IPO.
The conclusion is that Deliveroo isn’t profitable. The company reported an unadjusted loss that was PS223.7 million ($309 million) but that number decreased by more than PS100 million from the year before when it posted a deficit in the amount of PS317 million ($438 million). The company did not report the amount of revenue (sometimes known as turnover) in the statement issued today.
The company claimed that it serves 6 million customers through its three-sided marketplace that includes more than 115,000 takeaways, restaurants, grocery shops, and 100,000 customers in 800 locations in 12 markets.
In the same way, Deliveroo showed some clear growth in a year when numerous restaurants were forced to shut their doors and switch operations to take-away models as a result of COVID-19.
It states that it has made money in its “Adjusted EBITDA basis” over two quarters, with its underlying gross profit increasing by 89.5 percent in the second quarter to PS358 million ($495 million) in comparison with PS189 million in the year 2019.
The company’s Gross Transaction Volume (total amount spent by people purchasing food) was up 64 percent in the quarter to PS4.1 billion ($5.67 billion) and the run-rate during Q4 increased to PS5 billion. It’s not surprising given that Q4 was the period of the holidays as well as there was a time when the U.K. market (Deliveroo’s principal market and home market) has gone through not just two but two times of being shut down during that time (the second one is still in effect).
It also mentions that the gross profit margin as a percent of GTV has increased from 5.8 percent at the end of 2018 and will rise to 8.8 In 2020, it is 8.8 percent Some markets have risen up to the 12% mark.
“The company remains focused on investing in driving growth in a nascent online food market,” it stated in the EITF but I’m not convinced that nascent would be the exact word I’d choose. Deliveroo’s drivers are among the most well-known of the various delivery companies that are available in London. Deliveroo claims that its grocery and restaurant sectors comprise a targetable market worth PS1.2 trillion ($1.66 trillion) across the 12 areas in which it provides its services. According to that number, it is stated that only 3 percent of sales will be on the internet, “equivalent to less than 1 out of the 21 weekly meal occasions being online.”
This company’s valuation was more than $7 billion during its most recent round of fundraising, which was a $180 million round that came from Durable, Fidelity, and others at the time of the beginning of January this year.
It’s an enormous leap and is the basis of what the myths about technology are built on (with endless hours of sweat, blood as well as tears lots of luck, too). I had the pleasure of meeting Will Shu, the CEO, and founder of Deliveroo. He was just getting his feet wet at Deliveroo and was somewhat confused by the speed at which the company was growing, and where it was taking to. It’s interesting that he hasn’t forgotten the early days which will surely help keep the company in focus in a period where there are many opportunities and lots of opportunities to unravel focus.
“I did not intend to become an entrepreneur or a CEO. I wasn’t interested in start-ups and I never study TechCrunch. My experience isn’t like the Silicon Valley types with a million ideas,” he noted in his letter that was published in EITF. “I came up with one concept. A concept that was born out of frustration with myself. A concept that I was passionately obsessed about I wanted fantastic food delivered from incredible London eateries.”
The prospectus will reveal the amount that the company is planning to raise through its IPO therefore we’ll be able to find the numbers in the near future. However, Deliveroo said that it intends to “invest in its long-term proposition by developing its core marketplace, enhancing its superior consumer experience, providing restaurant and grocery partners with unique tools to help them grow their businesses, and providing riders with the flexible work they value alongside security.”
The company will also keep creating “dark kitchens” (which it markets as Editions); Signature, the white-label option for restaurants that offer delivery through their own websites; Plus, a Prime-style subscription service; and an on-demand supermarket that is expected to become an extremely lucrative market across Europe and around the world.