The Times - UK (2022-03-18)

the times | Friday March 18 2022 41

Business

The founder of Deliveroo moved to

reassure shareholders over its ability to

move out of the red as he outlined a

“longer-term path to profitability”.

Will Shu, 42, chief executive, said

that turning a profit was “a key focus for

the food delivery group this year and

beyond” with a target of breaking even

“at some point” during the first half of

next year or the first half of 2024.

Aiming for that target was not only

important for shareholders but “galva-

nising to go after” for the group’s

employees, he added.

He revealed the target alongside 2021

results that were described as “a mixed

bag” by one analyst, with revenues in

line with expectations, a below-par

gross profit margin and disappointing

2022 guidance.

Shu said the figures showed that the

company had continued to make good

progress in executing its strategy in its

first year as a public company, adding: “I

am proud of our performance.”

Shareholders might beg to differ

given the performance of the share

price since its initial public offering in

Deliveroo boss is confident

profit will arrive eventually

March last year. Despite gushing

support from Rishi Sunak for “a true

British tech success story”, the stock

slumped by 30 per cent in early trading

and has struggled ever since.

The shares, issued at 390p, hit a new

low of 101p this month. Yesterday the

stock rose 7½p, or 6.4 per cent, to 124p as

investors bought into Shu’s long-term

target. By 2026 he aims to hit an adjust-

ed earnings margin of at least 4 per cent

“with further upside potential beyond”.

Deliveroo, founded in 2013 by Shu

and Greg Orlowski, works with

100,000 riders and 117,000 restaurants

in 12 countries and is moving into gro-

ceries. At the issue price, the company

had a market value of £7.6 billion.

In the year to December 31, Deliver-

oo lifted revenues by 57 per cent to

£1.82 billion, but pre-tax losses widened

from £213 million to £298 million. The

gross transaction value was up 70 per

cent to £6.63 billion after a second-half

rise of 46 per cent. Underlying losses

rose from £11 million to £131 million,

not helped by higher marketing spend.

Shu said the “broader geopolitical

and economic impacts” of the conflict

in Ukraine added to the challenges.

Dominic Walsh

Stock markets across the world

are hugely volatile following

Russia’s invasion of Ukraine. Oil

and gas prices have been

spiralling, while British

companies are scrambling to

cope with the effects of soaring

Business

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in the shade

A new term reflects the inflation:

when Getir boasted of its bumper

$11.8 billion valuation yesterday it

said it had become “Europe’s first

grocery delivery decacorn” — a

private company with a price tag of

$10 billion or more.

Other examples include

Bytedance, the Chinese owner of

TikTok, Epic Games, which is

behind the Fortnite game, and

SpaceX, Elon Musk’s rocket

venture. Decacorns might remain a

rare breed, however. Pitchbook, a

venture capital researcher, has said

that the industry is “bracing for

change”.

“Investors have left themselves

vulnerable to valuation corrections

by sacrificing protective deal

terms in exchange for access to

deal flow, coaxed by high valuations

and high exit sizes,” it said in a

recent report.

Valuation

Market cap

Market cap

2021 revenues*

2020 revenues

2020/2021 revenues

2020/2021 revenues

2020/2021 revenues

When bought in Oct 2021

When bought in Feb 2021

$11.8bn (£9bn)

$1bn

£21.2bn

£53.4bn

£7bn

£17.6bn

£6.8bn

£20.3bn

£6.2bn

£28.8bn

*according to media reports. Getir does not

publish revenue figures.

2 020 reve

2020/202

When

£6. 8