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Online takeaway food aggregator Delivery Hero is rumoured to IPO before the end of summer in a deal valuing them as one of Europe’s biggest start-ups at up to 4 billion euros, according to sources within the have leaked the news that there are plans in place to announce its intention to list in Frankfurt by mid-June with an IPO four weeks later, they said.
The Berlin-based company founded in 2011 delivers meals from more than 150,000 restaurants in over 40 countries and employs upwards of 5,000 staff.
Goldman Sachs, Morgan Stanley and Citi are organising the Delivery Hero listing as global coordinators with UBS, Unicredit, Jefferies and Berenberg acting as bookrunners, according to sources. The investment banks have all declined to comment.
Delivery Hero, arguably one of the most successful start-ups in the portfolio of e-commerce investor Rocket Internet was always seen as most likely to IPO, after delays with sister companies such as HelloFresh who delayed their IPO due to slowing growth that would likely making underwhelming reading on their prospectus, however their has been growing speculation of them IPO’ing in the near future.
Rocket Internet shares (RKET.DE), which have been under pressure over concerns about heavy losses and falling valuations at its start-ups, were 4 percent higher at 1335 GMT (9:35 a.m. ET), making them one of the top gainers on the German small-cap index .SDAXI.
Rocket, which reports first-quarter results on May 31, had early success with online fashion firm Zalando (ZALG.DE), which listed in 2014 and has performed well since.
Delivery Hero CEO and founder Niklas Ostberg said the company was ready for a possible initial public offering but declined to comment further on timing or valuation.
“We can go at any point in time if we feel it is the right time,” Ostberg commented.
One of the sources said about a quarter of the company’s shares would be sold in the deal.
Another source said shares worth up to 1 billion euros would be sold, with about half that amount coming from new shares.
Delivery Hero said Tuesday its first-quarter revenue rose 68 percent on a like-for-like basis to 121 million euros. The loss-making firm did not publish earnings figures but Ostberg said it was on track to improve profitability as it grows bigger.
“With size comes profitability and our focus is on building size and service levels,” he said, adding that he did not rule out further acquisitions.
Earlier this month, Delivery Hero raised €387m by issuing new shares to South African media and e-commerce firm Naspers, diluting Rocket’s stake to 33 percent from just under 38 percent.
The biggest international players in online takeaway food are my old pals at Just Eat (JE.L) and Takeaway.com (TKWY.AS) – there has been some M&A Activity of late with markets being consolidated, with Uber and Amazon entering (albeit in a very lacklustre way) into meal delivery, both have found it difficult to achieve liquidity in many markets with the higher operating costs as they offer delivery and a b2c platform.
Kudos to Delivery Hero, whilst I have much love and affection for JUST EAT, they have been JUST EAT’s only real competition and you have to respect how well they have done over 6 and a half years. Another fantastic success story coming out of Europe, with many more such as TransferWise etc also scaling very quickly.
Well done to Niklas and the Delivery Hero team for the great work they have done thus far and if the sources are correct, the huge IPO will be well deserved….
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