fbpx Skip to content

Delivery Hero to sell £83m stake in Deliveroo

Delivery Hero Deliveroo
Image credit: Victor Velter / Shutterstock

Berlin-based Delivery Hero is selling its 4.5% stake in Deliveroo – worth around £83m – as the food delivery app sector continues to face challenges.

Delivery Hero said on Monday it intends to sell the entirety of its 68.2m shares in the London-listed firm.

According to the company, the new funds will go towards “general corporate purposes” and underline its “commitment to disciplined capital allocation”.

Food and grocery delivery apps experienced a titanic rise in value during the Covid-19 pandemic, with firms like Getir and Gorillas raising billions in investor funding. Deliveroo raised £132m from shareholders ahead of its IPO in 2021.

Times have worsened for the market since the end of the last lockdown amid the cost of living crisis.

Executives in the market have been on a cost-cutting, cash-raising mission over the last two years, with Deliveroo approving multiple rounds of layoffs.

Deliveroo has since cut losses and increased revenue as of its most recent trading update. It is yet to report a profit.

Last August, Deliveroo reported losses had dropped from £153m to £83m, with CEO Will Shu leaving the door open for a shareholder dividend. Earlier this month, Deliveroo upgraded its full-year earnings guidance to “slightly above” its previous £60m-£80m range.

Shares in Deliveroo and Delivery Hero both fell on Tuesday morning, dropping around 5% and 11% respectively.

Topics