How to Buy Deliveroo Shares UK

Deliveroo, one of the fastest-growing food delivery companies in the UK, is set to IPO on the London Stock Exchange on April 4.

In this guide, we’ll show you how to buy Deliveroo shares in the UK and cover the basics about the Deliveroo IPO.

Step 1: Find an App to Buy Deliveroo Shares UK

Deliveroo shares haven’t quite hit the market yet, but many brokers are planning to offer Deliveroo trading as soon as the shares land on the London Stock Exchange.

Step 2: Analyse Deliveroo Shares

Before you invest in the Deliveroo IPO, it’s important to understand how this food delivery company got to this point and what the stock could do once it hits the London Stock Exchange.

Deliveroo Share Price UK

Deliveroo was founded as a London-based food delivery company in 2013 by William Shu, who remains the company’s CEO. The company quickly expanded to over 200 locations across the UK, Europe, Australia, Hong Kong, the UAE, and Kuwait.

The company is highly similar to UberEats and Doordash, which also operate in the UK. Deliveroo relies on self-employed drivers to deliver food, and it has a subscription service that offers unlimited food delivery in addition to allowing users to purchase one-time food orders.

Amazon made an investment in Deliveroo in 2019 which gave Amazon a 16% stake in Deliveroo at a roughly £2 billion valuation. The company received another round of funding in January of this year that valued the company at £2 billion. In total, Deliveroo has received roughly £1.7 billion in private funding.

Deliveroo plans to price its shares between £3.90 and £4.60 per share when they debut on the London Stock Exchange on April 4, 2021. That corresponds to a market at the time of the IPO of £7.6 billion to £8.8 billion and the company is aiming to raise around £1 billion in new funding through the listing.

Notably, Deliveroo is offering shares not only to major investors, but also to existing customers. Anyone in the UK who has a Deliveroo account can apply to buy shares, although the company will prioritise its most loyal customers if the £50 million in shares it is setting aside for this purpose is oversubscribed.

Deliveroo Stock Fundamentals

Deliveroo generated revenue of £1.2 billion last year, but declared a loss of £223.7 million. Still, that represents an improvement from 2019, when the company declared a loss of £317.3 million.

The company expects to list on the LSE with a market cap of £7.6 billion to £8.8 billion, although this could change dramatically by the end of the first day of trading. Deliveroo has not calculated its earnings per share (EPS) ahead of the IPO.

Deliveroo Dividend Information

Deliveroo was not profitable in 2020 and does not expect to be profitable this year. The company does not pay a dividend and is unlikely to make payments to investors for at least several years.

Why Do People Buy Deliveroo Shares UK?

With the Deliveroo IPO coming up on April 4, should you buy Deliveroo shares UK as quickly as possible once they hit the market?

We’re pessimistic about Deliveroo’s prospects as a long term investment. However, the stock could be a good prospect to target for trading around the IPO. Here’s why:

Food Delivery is a Tough Business

Over the long term, it’s hard to see how Deliveroo succeeds. The company was unprofitable in the midst of the coronavirus pandemic, which arguably increased demand for food delivery to the highest level it will ever be. If Deliveroo couldn’t turn a profit last year, why should investors expect it to be able to in the years ahead?

Investors need to look no further than Deliveroo’s biggest competitors, Doordash and UberEats, to see just how difficult it is to turn a profit in the food delivery business. Doordash lost £110 million last year, while UberEats was a similarly money-losing venture for Uber.

Worse, these money-losing companies are all undercutting each other to win market share among the same set of customers. Doordash and UberEats have much deeper pockets than Deliveroo to continue losing money for years to come. So it’s much more likely that Deliveroo folds – or investors lose confidence and the share price plummets – before its competitors.

Another reason we have a negative long term outlook on Deliveroo shares is that the company doesn’t control its own fate.

For one thing, the recent UK court ruling that determined that Uber drivers are workers, not self-employed individuals, has enormous implications for Deliveroo. The company has similarly classified its food delivery drivers as self-employed contractors, and it’s almost certainly going to face fines and legal challenges not too long after its IPO.

Deliveroo’s rapid rise is also illustrative of how little moat any food delivery company has in the global marketplace. Deliveroo rose to challenge Doordash and UberEats in just 8 years. There are few barriers preventing another VC-backed competitor from breaking into the food delivery market and forcing Deliveroo to cut its prices even further.

Buying the Deliveroo IPO

Despite the fact that we’re bearish about Deliveroo for long term investing, it’s still worth looking at the food delivery company’s IPO on the LSE as an opportunity to turn a quick profit. On average, IPOs last year saw a first-day pop of 42% and a first-year performance of 75%. Doordash, which held its IPO in the US, saw an 86% gain on the first day of trading.

The key to trading around the IPO is to buy in at as close to the IPO price as possible. If you’re already a Deliveroo user, consider applying to receive some of the shares that the company has set aside for its customers. If you can’t get your hands on these shares, you’ll need a day trading app to help you get the market price on the day of the IPO.

So, if you’re willing to buy Deliveroo shares early and then drop them at the first sign of trouble, you could potentially make some money off the IPO.

Step 3: Open a Stock Trading App Account

Want to buy Deliveroo shares in the UK during the IPO? We’ll show you how to invest using the broker’s app, which offers 100% commission-free trading on hundreds of LSE-listed shares. This investment app also offers advanced technical trading tools so you can make quick moves around the IPO price.

To begin, download the app from the Apple App Store or from Google Play. Once the app is installed, open it and click ‘Join Now’ to create a new account. If you already have a Google (Alphabet) or Facebook profile, you can use those details to open your account.

The broker requires that you verify your identity before depositing funds and trading in order to meet the FCA’s Know Your Customer (KYC) rules. Take a photo of your driver’s license or of the photo page of your passport with your smartphone and upload it using the app. You will also need to take a photo of a recent utility bill or bank statement that shows your current address and upload that through the app.

Next, deposit funds into your trading account. You can make a payment by debit card, credit card, PayPal, Neteller, Skrill, or bank account transfer. The broker requires a minimum deposit of £160 for electronic payments or £500 for bank transfers.

Step 4: How to Buy Deliveroo Shares UK: Tutorial

Now that your account is funded, you’re ready to buy Deliveroo shares in the UK.

Head to your account dashboard and tap the magnifying glass to search for ‘Deliveroo.’ Tap on it when it appears, and then tap ‘Trade’ to open a new order form.

Enter the amount of money you want to invest in Deliveroo stock. Once you’re ready, tap ‘Open Trade’ to buy Deliveroo shares in the UK.

Deliveroo Shares Buy or Sell?

Deliveroo is in the highly competitive business of food delivery. Almost no major company operating in this market has managed to turn a profit thus far, and Deliveroo doesn’t have the same deep pockets as competitors like Doordash and UberEats. As much as we’d like to see Deliveroo succeed – it’s a homegrown UK company, after all – we’re bearish about the long-term prospects for Deliveroo shares.

That said, there is a potential opportunity for UK investors to make money off of the Deliveroo IPO. The red-hot IPO market has sent shares soaring on the first day of trading over the past year, and it seems likely that Deliveroo will experience the same sort of first-day bump. Savvy traders can buy Deliveroo shares early and sell them at the first sign of bad news to try to earn a quick profit.

Conclusion – Deliveroo Shares UK

Deliveroo’s IPO is one of the most highly anticipated events for the London Stock Exchange in 2021. This food delivery company is planning to debut with a market cap as high as £8 billion and is offering its own customers a chance to get in on the IPO.

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