Last Wednesday, the London Stock Exchange saw its worst IPO in history. The company to claim that unfortunate title, Deliveroo, saw its share price sink 30% on its first day of trading. But, despite the IPO disappointment, Deliveroo is stepping up hiring efforts.
The London-based food delivery startup was supposed to be the U.K.’s biggest IPO in over a decade by market value — just before going public, Deliveroo’s valuation hit £7.6 billion ($10.5 billion). On the first day of trading, however, the company issued shares at £3.90, which was already at the bottom of its initial range. By the end of the day, the price had already hit a low of £2.73, in part because of investor fears about profitability and the state of the gig economy.
Like most companies, Deliveroo’s hiring efforts all but disappeared as the pandemic took hold, but the company’s job listings have since bounced back. According to our data, Deliveroo currently has 205 open positions listed, a 19% increase year-over-year. Job listings hit an all-time high in October 2019, when Deliveroo had 347 openings. While it hasn’t completely recovered from its pandemic slump in growth, the company may still be on track to surpass its previous numbers.
The Amazon-backed food delivery app was founded in 2013 by American entrepreneur and former Morgan Stanley analyst Will Shu. Deliveroo has quickly become one of the hottest startups in the U.K., but investors are now raising concerns with its business model.
Regulators are cracking down on the gig economy. Last month, Uber reclassified all 70,000 of its U.K. drivers as workers entitled to a minimum wage and other benefits following a Supreme Court ruling. Deliveroo employs over 2,000 people across 12 markets, plus a network of over 100,000 riders and drivers delivering food from 115,000 restaurants and grocery stores. Many investors think it’s only a matter of time before Deliveroo's gig workers take action. If the company follows Uber, it could mean higher costs for worker benefits like holiday pay, pensions, and a minimum earnings guarantee.
This week, Deliveroo’s stock hasn’t recovered from opening day, hovering around its low point of £2.73 a share. According to Bloomberg, the IPO may have been a case of poor timing. U.K. markets aren’t as enthusiastic about delivery startups in general — companies like Just Eat Takeaway.com NV and Delivery Hero SE have already seen share prices fall this year. Deliveroo still has the option to cancel the IPO — it opted for a “conditional offer” until April 7 — but the company isn’t likely to make such a drastic move.
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.