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Deliveroo valued at €10 billion despite failure to deliver on profit

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By Guy Shone
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Deliveroo bicycle   -   Copyright  Frank Augstein/Copyright 2017 The Associated Press. All rights reserved.
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The food delivery company Deliveroo is set to give the London stock market its biggest new listing in more than seven years, after it announced it will be seeking a valuation of €10 billion euros when it goes public.

No date has been set for the flotation, but it’s expected to be in April

The target is above market expectations, even though the company has yet to make a profit. Euronews business analyst Guy Shone says Deliveroo will need to rethink its model, if it’s to convert startup success into long term growth.

"They’ve got challenges when it comes to the social impact of what they’re doing," Shone said.

"We’re seeing many companies in this space look really hard at not just what we eat but how we treat those gig economy workers, those casual workers that deliver all of our food to us. Now that is something that they are going to have to get right if they want to compete and develop that profit and growth in much more of a longer-term perspective than just getting the valuations right in the short term."

"They’re like so many tech-based industries, there’s tremendous interest, the trends seem to be supporting the growth of the business in the future but actually converting in a real profit in the short and medium-term remains a challenge," Shone explained.