Berlin-based online food takeaway startup Delivery Hero is planning to raise around 996 million euros($1.1 billion) through its initial public offering (IPO) later this month. Post this funding, the company would seek a mammoth valuation of around 4.39 billion euros($4.9 billion).
Delivery Hero helps to match diners with restaurants of their choice. It also has its own food delivery service which is currently active in over 50 major cities around the world. It has over 6000 employees and operates across a number of countries globally. Also, it has some leading brand like Pizza.de, Foodora, Lieferheld and Foodpanda under its name.
The Rocket Internet SE-backed startup is aiming to sell 39 million shares worth 996 million Euros ($1.1 billion) of which 19 billion will be priced in between 22 euros($24.5) to 25.50 euros($28.5) each. 15 million shares with come from existing shareholders, mainly the Rocket Internet. Also, according to Delivery Hero, the remaining 5 million shares which are indirectly owned by Rocket Internet could be placed with investors in an overallotment. Delivery Hero said that it will use the generated funds to clear its existing debts and boost the growth and development of its business. Rocket Internet, the German-based Internet company led by CEO Oliver Samwer, owns close to 35% of Delivery Hero.
In the past three years, this is the fourth float by a major online food delivery company. Delivery Hero has followed the US-based GrubHub, the UK-based Just-Eat and the Belgium-based Takeaway.com in a step to become public globally.
Delivery Hero is expecting the trading to kick-off on the Frankfurt Stock Exchange on June 30. At the mid-point of the price range, the gross proceeds for Delivery Hero would be around $500 million.
Delivery Hero was valued between 3.5 billion euros and 4 billion euros after South Africa’s Naspers Ltd invested around 387 million euros in the startup. Naspers Ltd. owns around 10% of the company.
Delivery Hero which operates in 42 markets across Europe, the Middle East, North Africa, Latin America and the Asia-Pacific has an access to a total delivery market worth 72 billion euros ($80.65 billion). This is much greater in comparison to Just Eat’s 28 billion euros and Takeaway.com’s 13 billion euros which operate in 12 and 10 markets respectively.
Delivery Hero’s margins at 10-11 percent currently lag its competitors, Just Eat(15 percent) and Grub(17 percent). But, once it starts handling delivery by itself, it can boost the same to around 13%.
The sales will be arranged by Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley.