Deliveroo To Hand Some Riders £10,000 Bonuses
Eligible Deliveroo riders to receive £200 up to £10,000 in bonuses when company goes public in London, following huge business boost during pandemic
Deliveroo is to award some delivery riders up to £10,000 in bonuses when it goes public on the London Stock Exchange.
The Amazon-backed food delivery firm confirmed its plans to go public following a surge in business during the pandemic.
The total value of transactions processed by the platform in 2020 rose 64 percent to £4.1bn, from £2.5bn the previous year.
The company’s losses also declined to £224m in 2020 from £317m the previous year.
Amazon stake
Deliveroo recently raised $180m (£130m), giving it a valuation of $7bn, and reports have estimated the market could value it at up to $10bn.
Amazon owns 16 percent of Deliveroo, after UK regulators cleared the investment last year.
The company is only one of many online businesses that have seen a huge rise in usage during the Covid-19 pandemic.
Some analysts have raised questions around the logic of a public offering, given that the company is far from profitability.
But investors have shown a strong appetite for new tech listings in recent months, with some listings soaring in value on the day of their debut.
Bonus levels
“Today, the business is so, so much bigger than I ever would have thought possible,” chief executive Will Shu said in letter released on Monday.
“Yet we truly believe we are still getting started. Our ambitions have increased as we start to truly understand and execute on the opportunity in front of us in online food.”
The company has more than 100,000 delivery riders and 115,000 restaurants in 12 markets around the world.
It said riders who have been with the company for at least a year would share in a £16m fund for bonus payments, with an average payment of £440.
Eligible riders are to receive at least £200, with “hundreds” of riders receiving the maximum bonus of £10,000.
Share structure
Deliveroo confirmed that it plans to list with dual-class shares, a structure followed by Facebook and Google owner Alphabet.
The structure, which allows company founders to take their firms public while retaining control, will give Shu 20 votes per share, while other investors will have 1 vote per share. The arrangement is to expire in three years.
The government said last week it would review rules that prohibit companies with dual-class structures from being listed on major FTSE indices. Deliveroo could later become eligible if the listing standards change.
