Deliveroo plc: history, ownership, mission, how it works & makes money

A Brief History of Deliveroo plc

Deliveroo plc was founded in 2013 by Will Shu and Greg Orlowski in London, initially as a restaurant delivery service. The company has expanded rapidly across the UK and internationally, with operations in over 200 cities worldwide.

In 2015, Deliveroo raised £25 million in a Series C funding round, valuing the company at £100 million. By 2016, Deliveroo achieved profitability in several markets, leading to further investment rounds totaling $475 million that year. The Series D round in April 2017 raised an additional £98 million, pushing the company's valuation to $1.5 billion.

In 2018, Deliveroo introduced its Editions model, allowing restaurants to operate delivery-only kitchens, expanding its restaurant selection without needing physical locations. This innovation was a significant factor in their sustained growth, with the company's revenue increasing to approximately £476 million for the year.

Deliveroo went public on the London Stock Exchange on March 31, 2021, with an initial public offering (IPO) price of £3.90, raising around £1.5 billion. The market capitalization at IPO was approximately £7.6 billion. However, the stock price fell sharply on its first day of trading, closing at £2.87.

In 2022, the company reported an operating loss of £147 million, despite revenue increasing to £1.8 billion, reflecting a growing demand for delivery services post-pandemic. In the same year, Deliveroo's gross transaction value reached £7.06 billion.

As of Q3 2023, Deliveroo has a monthly active customer base of approximately 8 million, with over 140,000 registered restaurants in its platform. The company’s revenue for the first half of 2023 was reported at approximately £1.2 billion, marking a growth of 8% year-over-year.

Despite facing economic challenges and competition from rivals such as Uber Eats and Just Eat, Deliveroo continues to innovate and expand its service offerings, including grocery delivery and the introduction of subscriptions for frequent users.

A Who Owns Deliveroo plc

Deliveroo plc, a prominent player in the online food delivery sector, has a complex ownership structure shaped by various stakeholders, including institutional investors, retail shareholders, and company executives.

As of the latest data available, Deliveroo's largest shareholders include both individual and institutional investors. The top five shareholders and their respective ownership percentages are listed below:

Deliveroo went public on March 31, 2021, with an initial public offering (IPO) price of £3.90 per share, valuing the company at approximately £7.6 billion. However, the stock has experienced volatility since its IPO, trading as low as £2.50 in October 2022, demonstrating the challenges faced in the competitive food delivery market.

As of the end of Q3 2023, the company's market capitalization stands at approximately £4.5 billion, reflecting ongoing adjustments to its valuation amidst changing market conditions.

Furthermore, Deliveroo's financial performance has been a significant factor affecting ownership dynamics. For instance, in its latest earnings report for H1 2023, Deliveroo reported revenues of approximately £1.8 billion, a year-on-year growth of 8%. This growth has been fueled by an expanding customer base and increased order frequency.

Deliveroo's ownership also reflects the strategic interests of major players in the tech and food sectors, with significant influence retained by its co-founder and CEO, Will Shu. Shu holds around 5% of the shares in the company, a crucial factor in guiding the company's strategic direction.

In recent developments, ownership stakes have been influenced by global market trends. For example, the 2023 interest rate hikes and changes in consumer spending patterns have pressured delivery services, thereby impacting shareholder value and investment strategies.

The ownership landscape of Deliveroo is indicative of both individual and large institutional strategies, emphasizing the balance between innovation in service delivery and the necessity for sustainable financial performance.

Deliveroo plc Mission Statement

Deliveroo plc aims to deliver the best food experience for customers through innovative delivery systems and a broad selection of restaurants. The company emphasizes its commitment to enhancing customer satisfaction and operational excellence.

The mission statement is focused on three key pillars: customer focus, restaurant partnerships, and operational efficiency. This approach not only defines the company's goals but also aligns with its overall strategy.

Key Financial Metrics

As of the latest financial reports, Deliveroo's performance indicators reflect its mission-driven approach:

Strategic Partnerships

Deliveroo has established numerous partnerships with restaurants and food chains, which are crucial to its mission of offering a diverse range of food options to customers.

• Partnerships with over 30,000 restaurants worldwide.
• Exclusive deals with leading restaurant brands.
• Expansion into new cities and countries, enhancing its delivery network.

Technology and Innovation

The company leverages technology to improve delivery efficiency and customer experience. Key technological advancements include:

• AI Algorithms for optimized delivery routes.
• Real-time Tracking for customers to track their orders.
• Data Analytics to understand customer preferences and improve service.

Deliveroo's focus on innovation is evident in its substantial investment in technology, amounting to **£100 million** in 2023 alone, aimed at enhancing its logistics and customer engagement platforms.

Commitment to Sustainability

Deliveroo is increasingly aware of its environmental impact, pledging to reduce emissions across its delivery fleet. The company aims for:

• 100% of deliveries to be carbon neutral by **2025**.
• Investment in training for drivers in eco-friendly delivery practices.
• Partnerships with local food producers to reduce food miles.

Market Position

Deliveroo continues to be a significant player in the food delivery sector, competing with other major companies like Uber Eats and Just Eat. Market share data for 2023 indicates:

Deliveroo's investment in brand identity and partnerships is designed to uphold its mission and ensure long-term sustainability and growth in the competitive food delivery landscape.

How Deliveroo plc Works

Deliveroo plc operates as an online food delivery company, connecting customers with local restaurants through its platform. The company utilizes a logistics network of riders to facilitate the delivery of food orders. The following details highlight the operational and financial aspects of Deliveroo's business model.

Business Model

Deliveroo generates revenue primarily through commissions charged to restaurants for orders placed through its platform, as well as delivery fees charged to customers. In 2022, Deliveroo reported a revenue of £1.8 billion, representing an increase of 13% year-over-year.

Operational Framework

The operational framework includes a three-step process:

• Customers place orders via the Deliveroo app or website.
• Restaurants receive and prepare the orders.
• Deliveroo riders pick up and deliver the food to customers.

Rider Network

As of 2023, Deliveroo has a network of over 100,000 riders across various markets. The company incentivizes these riders with flexible working hours and competitive pay, with average earnings reported at approximately £12 per hour.

Market Presence

Deliveroo operates in several countries, with the UK being its largest market. In Q2 2023, Deliveroo's market share in the UK food delivery sector was reported at 38%. Other notable markets include:

Financial Performance

Deliveroo's financial performance has shown notable resilience in a competitive market. Key financial metrics for 2022 include:

• Net Loss: £147 million
• Adjusted EBITDA: £60 million
• Active Customers: 8 million
• Orders Delivered: 210 million

Recent Developments

As of 2023, Deliveroo has focused on expanding its grocery delivery services, in which it has invested significantly. The grocery delivery segment is projected to contribute approximately £300 million to the revenue by the end of 2024.

Future Outlook

Deliveroo's strategy for future growth includes increasing partnerships with local restaurants and enhancing its technology platform to improve user experience. The company aims to achieve profitability by 2024, backed by its robust customer base and diversified offerings.

How Deliveroo plc Makes Money

Deliveroo plc generates revenue through several primary streams, primarily focusing on its food delivery services. The company operates in multiple markets, benefiting from a diversified approach to customer engagement and partnerships with restaurants.

Revenue Streams

• Delivery Fees: Deliveroo charges customers a fee for each delivery, which varies based on distance and the restaurant.
• Restaurant Commissions: The company typically takes a commission of between 20% to 30% from the restaurants for every order placed through its platform.
• Subscription Services: Deliveroo Plus is a subscription service that allows customers to pay a monthly fee for free delivery on orders above a specified amount. The subscription costs around £11.49 per month.
• Advertising Revenue: Restaurants can pay for promotional placements and visibility on the platform, contributing additional income for Deliveroo.

2019 Financial Performance

In 2019, Deliveroo reported revenues of approximately £476 million, marking a significant growth from £277 million in 2018. The company also posted an operating loss of £317 million for the same period.

Market Growth and Expansion

Deliveroo's global reach includes operations in over 200 cities across 12 countries, reflecting its aggressive expansion strategy. The UK is the largest market for Deliveroo, contributing a substantial share of the total revenue, estimated at around 60%.

2020-2022 Performance Trends

For 2020, Deliveroo experienced a surge in demand due to the COVID-19 pandemic, with revenues increasing to approximately £1.2 billion. The company made a notable regulatory filing in April 2021, revealing a revenue of £1.8 billion for 2021, with an adjusted EBITDA loss of £147 million.

Cost Structure

Deliveroo's cost structure includes significant expenses related to logistics, marketing, and technology. The company has invested heavily in its logistics network, resulting in a cost of sales as a percentage of revenue averaging around 75%.

Recent Financial Developments

In the first half of 2022, Deliveroo reported revenues of approximately £1.1 billion and maintained an active customer base of over 8 million users. The company continues to focus on improving delivery efficiency and reducing costs to enhance profitability.

Deliveroo's focus on expanding partnerships with grocery retailers has also opened new revenue channels, with grocery sales contributing about 15% of total revenue in 2022.