Deliveroo’s founder is poised to sell millions of pounds-worth of shares in the food delivery app as part of a blockbuster stock market debut that will see him become one of Britain’s wealthiest technology entrepreneurs.
Sky News has learnt that Will Shu, who launched the company less than a decade ago, is likely to sell a small part of his 6.2% holding in Deliveroo – which in total could be worth in the region of £500m.
People close to the company said this weekend that Mr Shu had yet to make a final decision about the size of any share sale, although one insider suggested it was likely to involve less than £50m of Deliveroo stock.
That would represent only a small fraction of Mr Shu’s stake.
A source close to him said he had sold a small number of his own shares on “more than one” occasion in the past, although the latest transaction is likely to represent his biggest single payday to date.
His decision could be disclosed in the formal prospectus for Deliveroo’s initial public offering (IPO), which will be published on Monday.
The document will reveal a price range for the company’s shares, which is expected to catapult it into the ranks of Britain’s biggest home-grown tech start-ups.
Deliveroo was valued at $7bn in a pre-IPO funding round less than two months ago but is said to have seen strong enough demand during an investor roadshow to be valued now at $9bn-$10bn.
In a statement released earlier in the listing process, Mr Shu said he had “never set out to be a founder or a CEO”.
“Today we operate in 12 markets right across the world. 115,000 food merchants, over 100,000 riders, millions of consumers.
“Every single month, every single year, we focused on getting better – sometimes incrementally and sometimes by leaps and bounds – focusing on great food and being customer-obsessed. But the last 12 months were different.
“I was sad to see many of our partners struggle – restaurants owners I’ve known for years face closure and ruin – all due to some terrible virus. So we took action to help.”
Half a dozen investment banks, led by Goldman Sachs and JP Morgan, are working on the flotation.
It has appointed Claudia Arney, a former Premier League and Ocado director, as its chair, and Next’s chief executive, Lord Wolfson, as an independent director.
The company will float in London with a dual-class share structure for three years that will allow Mr Shu to retain control of the company.
Amazon-backed Deliveroo is one of Britain’s best-known technology ‘unicorns’ – companies worth at least $1bn.
Its decision to float in the UK has been welcomed by the chancellor, Rishi Sunak, who hailed it as “a true British success story”.
Nevertheless, Deliveroo continues to face questions about the terms on which its riders work for it and the funding model it uses with restaurant partners.
Amazon’s investment – following a lengthy competition inquiry – as part of a $575m fundraising has prompted Deliveroo to turn its attention towards further innovation in the fight against rivals Uber Eats and Just Eat Takeaway.com.
Other shareholders, including the private equity firm Bridgepoint and the institutional investors Fidelity and T Rowe Price, may sell part of their holdings, although Amazon is unlikely to offload any of its stake.
Last week, it confirmed it would raise £1bn from the sale of new shares, in addition to disposals by existing investors.
Deliveroo now has around 45,000 restaurants on its platform in the UK, although its stellar valuation comes at a torrid time for many of its restaurant partners, with hundreds of thousands of jobs at risk across the sector as a result of the pandemic.
A Deliveroo spokesman declined to comment on Mr Shu’s plans.
(c) Sky News 2021: Deliveroo founder Shu to serve up stake in £7.5bn flotation