Last week it was Delivery Hero’s successful IPO, which has valued the Berlin company at over $5 billion. This week it’s the turn of London’s Deliveroo, whose Uber-like platform has whetted the appetite of Softbank’s $93bn Vision Fund. Despite the best efforts of Google, this week is becoming best known as a golden one for the expanding food delivery tech sector.
Deliveroo, founded in 2012 by former investment banker Will Shu, has risen to become one of Britain’s fastest-growing tech companies. Last August a $275m series E funding round took its total investment to a little under half a billion dollars. Softbank’s alleged interest could push Deliveroo’s valuation past $1.5bn–easily securing its status as a unicorn brand.
Delivery Hero went public last Friday with an offering on the Frankfurt stock exchange. Its share price rose 5.5% on the first day, reaching $30.58. Today its price has risen to $32.09, confirming a successful few days of business for the 35% Rocket Internet-owned firm. The $530m Delivery Hero has earned from the offering will go towards growth: it is already present in more than 40 countries.
Yet both companies have clouds hanging over their heads. Deliveroo faces a UK employment tribunal over its treatment of riders–’Roos’ in its vernacular–who, as independent contracters akin to Uber drivers, have no access to holiday pay, minimum wage or unionization. A case, being brought in London, is being seen as a significant barometer for the future of the firm’s pay model.
Delivery Hero suffers no such employment scandals. But its financials have left some concerned about its public offering. The company still makes a loss totaling $230m–though its 2016 rose 71% and orders increased by 51%. Its leadership will hope that last week’s IPO can help it obliterate competition in key markets worldwide–particularly in developing markets such as India.