Let it not be said that Deliveroo isn’t a fantastically convenient company. Throughout lockdown a steady flow of food from some of my favourite restaurants has provided much needed cheer. Sadly, for the company executives, popularity and ubiquity does not necessarily mean profitability and without profits London investors can be punishingly sceptical – as the company has found out in what has been dubbed “the worst IPO in history”.
At the time of writing, Deliveroo’s share price has fallen nearly 30% to 281.93, down from the initial asking price of 390p a share. This shellacking by the markets is a bitter pill to swallow not just for the company but also for Rishi Sunak and the Treasury. Deliveroo’s IPO was supposed to act as proof that the City could do tech IPOs too – at a time when British start-ups like the online used car dealership like Cazoo have been heading to New York to be listed on the stock market. The UK had even tweaked its financial regulations to try and make itself more attractive – reducing the amount of stock that had to be listed, changing prospectus requirements, and introducing dual class share structures that give company founders more power.