Food delivery platform Deliveroo has confirmed that it will list in London when it sells shares as part of its upcoming IPO (initial public offering) that is expected to value the business somewhere around £7.5 billion. This will provide a lift for London’s stock market in the wake of Trustpilot’s decision to float in London earlier this week.

The company plans to adopt a dual-class share structure for the first three years to give co-founder and chief executive CEO Will Shu greater control over the company early on. The Hut Group, or THG (THG), recently floated in London with a dual-share model.


Twin-stock structures are popular with founder-owned businesses in the US and particularly with many of the big tech IPOs in recent years. Institutions and retail investors in Facebook, for example, own Class A shares which carry one vote per share. But founder Mark Zuckerberg, executive management and directors are Class B owners, with 10-times the voting rights.

The structure is seen by some as a way to attract great growth company IPOs to London and prevent Britain’s best businesses from being taken over on the cheap. UK microchips designs champion ARM was taken over for £32 billion in 2016, a sale that many fund managers now regret backing.

Others see dual-class structures as fundamentally undermining the power of their shareholder owners.

Deliveroo’s dual-share model will bar it from a premium listing on the London market, which means it won’t become part of the FTSE 100, the UK’s benchmark index. The company plans to revert to a single-share class system after three years on the stock market.


Chancellor Rishi Sunak pushed for a regulations rethink on dual-class shares in yesterday’s Budget. Changes could see companies with dual-class stocks be admitted to the LSE’s premium list, and the FTSE 100, FTSE 250 and other indices, in time.

In January, Deliveroo raised £133 million of growth funding, valuing the business at £5 billion at the time. That was sharply up on the rough £3 billion value or so estimate in November 2020.

The battle for market share in the food delivery space has been heating up in recently with chief rivals Uber Eats and Just Eat Takeaway (JET) investing heavily. Deliveroo recently announced expansion plans that will see its delivery riders and drivers operate in 100 more UK towns and cities this year as demand continues to surge during lockdown.

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Issue Date: 04 Mar 2021