Delivery Hero’s valuation surpasses $5B following successful IPO

Fundings and Exits

Delivery Hero’s valuation topped $5 billion after the food delivery firm went public in a listing on the Frankfurt stock exchange.

The listing, announced earlier this month, came at a €25.50 share price, at the top of its pricing range. The share price quickly rose to reach as high as €26.90 — or up 5.5 percent — on the first day of trading, according to Bloomberg. That peak price gave six-year-old Delivery Hero, which is present in more than 40 countries, a market capitalization of around €4.5 billion, or approximately $5.1 billion.

Delivery Hero earned around €465 million ($530 million) from the IPO, which it plans to use to repay loans and invest in growth. That’s in contrast to US food delivery outfit Blue Apron, which endured a rocky start to life on the NYSE less than 24 hours earlier.

Despite a successful public debut, Delivery Hero is not profitable. It booked a total loss of €202 million ($230 million) last year, although total revenue for 2016 did rise 71 percent year-on-year to reach €347 million ($390 million) and overall orders rose by 51 percent, too. That was thanks in no small part to its acquisition of Rocket Internet’s FoodPanda business which gave Delivery Hero a presence in 20 new countries across Eastern Europe, the Middle East and Asia, and strengthened its position in many others.

Today’s IPO is a major boon for Rocket Internet, which owns a 35 percent stake in Delivery Hero thanks to the FoodPanda deal. (Investment firm Naspers is another large owner with a 10 percent stake courtesy of a pre-IPO investment.)

German incubator-cum-investor Rocket Internet has been criticized for a portfolio of loss-making business, although it has now managed to exit two of its highest profile ventures. Beyond FoodPanda, it has sold its entire stake in Southeast Asia-based e-commerce company Lazada — this week Alibaba spent $1 billion buying equity from a range of backers, including Rocket Internet and Tesco, to increase its total ownership from 51 percent to 83 percent.

Featured Image: Delivery Hero (Facebook) (IMAGE HAS BEEN MODIFIED)

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