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Aside from Deliveroo, some other firms are also reportedly seeking to list in London.
Online food delivery and Amazon-backed company Deliveroo has picked London as the location for its potential initial public offering (IPO). The British food delivery firm announced its IPO plans on the 4th of March but is yet to provide financial details about the listing.
Deliveroo Seeks Potential IPO in London
In the IPO announcement, Deliveroo said it is adopting a dual-class structure for its IPO in London. The structure would help the company’s founder and CEO, Will Shu, maintain control over the company. However, the dual-shares structure would only last three years after the IPO, and Deliveroo would transit to the traditional single class structure.
In a statement, CEO Shu said:
“Deliveroo was born in London. This is where I founded the company and delivered our first order. London is a great place to live, work, do business and eat. That’s why I’m proud and so excited about a potential listing here.”
CNBC noted that Deliveroo raised $575 million from Amazon.com Inc (NASDAQ: AMZN) in a funding round in May 2019. However, antitrust regulators froze Amazon’s investment in the online food delivery company, citing competition concerns. Deliveroo’s finances were affected amid the review by the Competition and Markets Authority (CMA). In April 2020, the CMA eventually cleared Amazon’s investment in Deliveroo. The CMA’s decision came when Deliveroo was experiencing a deterioration in its financial position due to the coronavirus outbreak.
Apart from Amazon, Deliveroo is also backed by General Catalyst, Fidelity, Durable Capital Partners, T. Rowe Price, Accel, and Index Ventures.
Deliveroo’s decision to go public in London came after the British government-backed review made proposals aimed at reforming London’s listing rules. With this, Prime Minister Boris Johnson hopes to convince more tech firms to list in London, hence improving the stock market. Also, the reformed rules will enable dual-class shares of tech giants like Google LLC (NASDAQ; GOOGL) and Facebook Inc (NASDAQ: FB) to list in London.
London Hopes to Attract High-Growth Tech Giants
Deliveroo’s market debut in London is such exciting news for London’s stock market which has been hoping to attract tech giants to compete with New York and the European Union.
According to British Finance Minister Rishi Sunak, the UK is “one of the best places in the world to start, grow, and list a business”. He added Britain is determined to uphold its high reputation following its departure from the European Union. Hence, the government seeks to encourage prominent and established businesses in the UK.
Speaking on Deliveroo’s move to list in London, Sunak said:
“Deliveroo has created thousands of jobs and is a true British tech success story. It is great news that the next stage of their growth will be on the public markets in the U.K.”
Aside from Deliveroo, some firms are also reportedly seeking to list in London. Some of the firms include fintech start-up Wise and cybersecurity company Darktrace.