Deliveroo, the online food delivery company founded in London, has been in business since 2013 and has accumulated losses of £1.1bn ever since. Last month it went public on the London Stock Exchange – in a move many hoped would be a boost for a market that is lacking in big tech stocks. Unfortunately, it became one of the worst UK IPOs for a large company in history, and is unlikely to attract other startups to list there rather than on the friendlier turf that NASDAQ has given tech IPOs thus far. There has been ongoing controversial issues attached to Deliveroo including the fact that shares plunged as much as 30% in its first day of trading.
Can it really make a lot of money from delivering food? Its initial flotation valuation certainly assumes that it will but its share prices say otherwise.
Let’s see what the Valutico valuations says, Deliveroo’s DCF valuation is negative due to its heavy reinvestment of cash into growth, but using multiples of Revenue paint a more positive light onto the firm. At just over 2.5x 2021 sales, Deliveroo trades relatively in line with GrubHub (3.2x sales) but far below DoorDash (over 11x sales) who went public late last year:
–> Today’s Market Cap: £4.5bn
–> Valutico’s EV/Sales 2021 Valuation: £4.5bn
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