Brief: Deliveroo confirms London for IPO; sets aside $69m shares for users, $22m for drivers

• Deliveroo has selected its home city of London as the venue for its planned IPO, opting for a time-limited dual-class share structure “to ensure stable execution of management’s strategy and enable continued focus on ambitious long-term growth plans,” it said in a statement.
• The food delivery app is reportedly earmarking £50 million ($69 million) of stock for its users, who’ll each have the chance to buy up to £1,000 ($1,383) worth of shares by registering their interest in-app when it floats later this year.
• As part of the listing, the startup will also pay its delivery drivers — who are employed as independent subcontractors — performance-related bonuses of between £200 ($277) and £10,000 ($13,827) out of a £16 million ($22.3 million) “thank you” fund.

Why it matters:

Deliveroo revealed its IPO plans in January, when it raised $180 million to expand its grocery delivery and ‘dark kitchen’ offerings. That round valued Deliveroo at about $7 billion, according to the Amazon and Fidelity-backed startup.

Since launching in the UK in 2013, Deliveroo has expanded into multiple European, Middle Eastern, and Asia-Pacific markets. In its most recent financial results for FY 2019, the company — which says it was profitable “for over six months at the operating level” last year — reported a 62% rise in sales, which hit £772 million ($1.07 billion); but also saw pre-tax losses widen by almost 31% to £318 million ($440 million).

Like other ‘shared economy’ businesses that rely on self-employed subcontractors, Deliveroo has faced criticism over its treatment of workers. Deliveroo drivers have held strikes over alleged poor working conditions, low pay, and lack of holiday and sick pay provisions.