Deliveroo funding round values firm at over $7 billion

Deliveroo has raised more than $180 million in its latest funding round, valuing the U.K. online food delivery company at over $7 billion, according to a company statement.

The investment comes as the Amazon.com Inc.-backed firm eyes a potential listing this year, which is expected in or around April.

The funding round, led by existing shareholders Durable Capital Partners LP and Fidelity Management & Research Company LLC, pegs the startup’s valuation on a par with U.K. blue-chip grocer J Sainsbury Plc’s market capitalization and eclipses that of Wm Morrison Supermarkets Plc.

As lockdowns restrict people’s movement and businesses close, food delivery firms like Deliveroo and Just Eat Takeaway.com NV saw a boost as consumers ordered takeaways from home.

Despite the rise in demand, competition for market share remains fierce, with Delivery Hero recently raising as much as $1.6 billion in a share sale to fund potential deals, while Just Eat Takeaway has been making “significant” investments, according to a recent trading update.

Deliveroo said it will continue to invest further in its business, including expanding its on-demand grocery service and “Editions” dark-kitchen concept.

In December, the company said it had been profitable “at the operating level” for more than six months, with an operating revenue in 2019 of 771.8 million pounds ($1,048.8 million), up 62% on the previous year. It said a 319.9 million-pound loss for 2019 was “due to investment.”

Deliveroo had worked with more than 140,000 restaurants and 110,000 delivery riders globally.

Food delivery firms are expected to see orders continue to rise this year, but at a slower pace compared with the demand generated during 2020 lockdowns, according to Bloomberg Intelligence research.

Standard commissions in the sector can reach 30% and growth in 2021 will be partially dependent on the successful rollout of vaccination programs.

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