Deliveroo IPO

WiresDreamDisasters

So Deliveroo are thinking of going public, and are asking customers if they'd be interested in buying shares. Anyone seen this? Got any thoughts?

Simonh

should be a good bet I reckon - I doubt the pandemic impact will see much rolloff after we are allowed out again.

monquixote

It depends on their fundamentals.

A lot of these "Uber for x" disruptor businesses have a very dodgy foundation.

In the startup world growth / customer aquisition is all that matters and profitability and costs are seen as things that can be worked out later.

That has led to a number of companies like We Work and Uber having a business model which is essentially taking money from investors and using them to subsidise office space / taxi rides.

If you believe that there is some element of a moat or network effect in the business so that by doing a land grab you can secure a market advantage and then drive efficiencies, or in some other way lock out rivals then that's a good bet (See Amazon, Facebook for good examples).

If you don't have that the market remains efficient and you are unable to extract monopoly profits which means that it's only ever going to be a race to the bottom. In the example of Deliveroo I happily use both them  and Just Eat (so switching costs are low) so it's hard to see how they can differentiate on anything other than delivery costs as the app is essentially a search box and a payment provider.

Zero to One by Peter Theil is an excellent book on this subject.

strtdv

Deliveroo have yet to make a profit for a complete financial year.
They rely on cheap labour, and recent rulings on Uber make that seem unlikely to be a sustainable business model.

An IPO will be a way for investors to get their money out before people realise the business model isn't sustainable.

spark240

I read that people are now willing to pay over the odds just save walking to the local shop.l.this is very apparent from the food deliveries we get to our office 

joneve

There are more and more services (of which we are one) who are beginning to offer similar solutions but without the 35% commission That deliveroo charge. From our experience, our customers only use Deliveroo to process orders if they ABSOLUTELY have to. They’d much rather take orders over the phone or via other methods if possible. 

axisus

Our house every other week:

Hey Deliveroo, we got most of the order but the chicken pieces weren't delivered!!!!

OK, sorry, we'll credit your account.

Thanks, my daughter will just starve this time .....