Tech: Will Shu, the founder of $2 billion Deliveroo, said an IPO is ‘somewhat logical’ for the company

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Deliveroo CEO William Shu.
Deliveroo founder and CEO William Shu told Business Insider that an
IPO would be a logical next step for the food delivery company, given
its size, ambition, and the lead investors in its last gigantic round of
financing. The company is currently valued at over $2 billion (£1.5
billion), and has taken $860 million (£654 million) in venture funding
so far — staggering sums given that it was only founded in 2013.


In Deliveroo’s last Series F round of funding, the lead investors
were T. Rowe Price and Fidelity — two traditional financial
institutions. Normally, tech startups get their money from smaller
venture capital funds.

When asked by Business Insider at the Web Summit technology
conference in Lisbon if he had to stage an IPO so that his investors
could see a return on the nearly $900 million (£685 million) they have
invested, Shu replied, “We’re thinking about all kinds of possibilities.
I think an IPO is somewhat logical given the lead investors in this
last round. Those are public market investors, T. Rowe Price and
Fidelity.”

Would Shu be comfortable running a public company (as opposed to a
private one), given all the extra scrutiny and distraction that comes
with it?

“What I am focused on is running the company and winning, and really
building a product which means the best restaurants for consumers, and
getting food to them quickly. Whether that’s in the private space or
public space is — there’s definitely differences,” he said. “But
ultimately … there’s pros and cons to both, right? I think that for me
that’s my focus and whether that be in the public arena or private
arena, that’s fine.”

Deliveroo currently has more than 1,000 employees in 12 countries, covering more than 150 cities.

‘The US is a market that, I think, if we want to go in we have to go into a lot of cities simultaneously’

The one obvious place Deliveroo is not, however, is the US,
even though Shu is originally American. The US seems an obvious place
for Deliveroo to grow given Americans’ love of both food and apps.

“The US is a market that, I think, if we want to go in we have to go
into a lot of cities simultaneously, it’s such a big market,” he says,
and thus the company has stayed away so far. “We’re focused on what
we’re doing right now” in the other 12 countries, he said.

Of course, if your plan to conquer America required a multi-city
launch there, you’d need a lot of financing for that … which might
make an IPO even more tempting.

Shu also told us that Deliveroo routinely fields acquisition interest
from other companies. “There’s always strategic discussions, inbounds
and outbounds, but we want to build one of the biggest companies in the
world. That’s what we’re focused on, so that stuff is not of
super-interest, especially after raising a lot of money as well.”

It’s normal for companies to continuously engage in discreet
“strategic” discussions with potential acquirers, of course. But it’s
less usual for a CEO to say that aloud. The company is likely worth a
lot more than its paper value of $2 billion-plus, so a potential
acquirer would have to be massive (Uber would be one obvious partner),
making the list of contenders very short, and an IPO more tempting.

Shu’s statements dovetail with the thoughts of Martin Mignot, a partner at Index Ventures and a Deliveroo investor and board member, who told Business Insider
in September, “Obviously the idea is in the next few years, hopefully
the company can be in a position to IPO then, at that stage, the public
market will want to see a clear path to profitability.”

Shu also reconfirmed one other ongoing matter of record:
He still does food deliveries on occasional Sundays like a normal
Deliveroo rider, and none of his customers have yet twigged that their
pizzas were delivered by the CEO of the company.

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