Independent Research, Food Delivery Space, Newmoon Capital

Newmoon Capital

Independent Research, Food Delivery Space

We look for owner-operators in what we believe are either highly defensible assets or soon to be highly defensible assets, trading at a fraction of their future potential.

Private Capital Markets

£8bn at the mid-point… that’s pretty high. That prices the company on a much higher valuation than $DASH on a comparable accounting perspective. Also, existing investors which include Will Shu will be selling OVER £600mn shares.

£8bn at the mid-point… that’s pretty high. That prices the company on a much higher valuation than $DASH on a comparable accounting perspective. Also, existing investors which include Will Shu will be selling OVER £600mn shares.

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Roofoods Ltd, the company behind the on-demand food delivery service <a href="https://www.smartkarma.com/entities/roofoods-ltd" target="_blank" data-smartkarma-citation="entities:27468:1" rel="noopener">Deliveroo (1022770D LN)</a>, plans to raise around £1.0bn ($1.4bn) via an IPO on the London Stock Exchange over the next few weeks. The company had a private market valuation of $7.0bn in July last year, and various media reports suggests that the valuation could increase by about $3.0bn to $10.0bn following the IPO.The food delivery industry’s medium to long term growth potential may not concern investors for now, but the competition and the lack of profitability might become a big concern, especially if the current tech bubble bursts anytime soon.Deliveroo made a net loss of £226.4m in 2020, which is about 19.0% of revenue compared to <a href="https://www.smartkarma.com/entities/just-eat-takeaway-908587b0-d4c9-488a-801b-2910cf29e24b" target="_blank" data-smartkarma-citation="entities:28360:1" rel="noopener">Just Eat Takeaway (TKWY NA)</a>’s 2020 net loss of €151.0m (£129.9m) and net margin of -7.4%.We see Deliveroo’s path to profitability being blocked by excessive competition. Therefore, we are not 100% confident on Deliveroo’s business model to consider it as a as a long-term investment. That said, all these recent high profile tech IPOs had excellent stock market debuts. If priced decently, it is difficult to think that a famous IPO like Deliveroo will not provide similar upside on trading debut.

Roofoods Ltd, the company behind the on-demand food delivery service Deliveroo (1022770D LN), plans to raise around £1.0bn ($1.4bn) via an IPO on the London Stock Exchange over the next few weeks. The company had a private market valuation of $7.0bn in July last year, and various media reports suggests that the valuation could increase by about $3.0bn to $10.0bn following the IPO.The food delivery industry’s medium to long term growth potential may not concern investors for now, but the competition and the lack of profitability might become a big concern, especially if the current tech bubble bursts anytime soon.Deliveroo made a net loss of £226.4m in 2020, which is about 19.0% of revenue compared to Just Eat Takeaway (TKWY NA)’s 2020 net loss of €151.0m (£129.9m) and net margin of -7.4%.We see Deliveroo’s path to profitability being blocked by excessive competition. Therefore, we are not 100% confident on Deliveroo’s business model to consider it as a as a long-term investment. That said, all these recent high profile tech IPOs had excellent stock market debuts. If priced decently, it is difficult to think that a famous IPO like Deliveroo will not provide similar upside on trading debut.

Deliveroo IPO: Plagued With Intense Competition

Judging from the twitter DMs, several of my points from my previous post have gone over the head of some investors, particularly the one around Signature (white label delivery). Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10 chains represent 35% of ALL UK orders. Some of such chains include Nando’s, Wagamama, and McDonalds. The top 100 chains could easily be more than 50% of the UK business, if not much more. This is the case (if not moreso) for Uber Eats, and less the case for $TKWY.

Judging from the twitter DMs, several of my points from my previous post have gone over the head of some investors, particularly the one around Signature (white label delivery). Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10 chains represent 35% of ALL UK orders. Some of such chains include Nando’s, Wagamama, and McDonalds. The top 100 chains could easily be more than 50% of the UK business, if not much more. This is the case (if not moreso) for Uber Eats, and less the case for $TKWY.

Deliveroo Part 6 - White Label Killed the Delivery Star

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Established in 2013, Deliveroo is getting ready to complete its IPO on the London Stock Exchange in the next several weeks. Backed by <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a>, Deliveroo is one of the largest food delivery service companies in the U.K. Amazon owns a 16% stake in Deliveroo. The Deliveroo IPO is expected to be one of the biggest IPOs in the U.K. this year. It has been reported that the market that the company's market cap post IPO could be nearly <a href="https://edition.cnn.com/2021/03/08/investing/deliveroo-ipo-london/index.html" target="_blank" rel="noopener">$7 billion to $10 billion. </a>Deliveroo processed £4.1 billion ($5.7 billion) in total transactions on its platform in 2020, up 64% YoY. Adjusted EBITDA/GTV ratio improved significantly from -122.7% in 2019 to -2.7% in 2020. <div class="content-highlight">Comparison With DoorDash's Market Cap/GOV and Deliveroo's Implied Market Cap - DoorDash currently has a market cap of $43.7 billion. DoorDash had total marketplace GOV (gross order value) of $24.7 billion. If we divide market cap/GOV, this results in a ratio of 1.8x. If we use this multiple (1.8x) and apply it to Deliveroo's total gross transactional value of £4.1 billion ($5.7 billion), this results in an implied market cap of $10 billion for Deliveroo. </div>

Established in 2013, Deliveroo is getting ready to complete its IPO on the London Stock Exchange in the next several weeks. Backed by Amazon.com Inc (AMZN US), Deliveroo is one of the largest food delivery service companies in the U.K. Amazon owns a 16% stake in Deliveroo. The Deliveroo IPO is expected to be one of the biggest IPOs in the U.K. this year. It has been reported that the market that the company's market cap post IPO could be nearly $7 billion to $10 billion. Deliveroo processed £4.1 billion ($5.7 billion) in total transactions on its platform in 2020, up 64% YoY. Adjusted EBITDA/GTV ratio improved significantly from -122.7% in 2019 to -2.7% in 2020. Comparison With DoorDash's Market Cap/GOV and Deliveroo's Implied Market Cap - DoorDash currently has a market cap of $43.7 billion. DoorDash had total marketplace GOV (gross order value) of $24.7 billion. If we divide market cap/GOV, this results in a ratio of 1.8x. If we use this multiple (1.8x) and apply it to Deliveroo's total gross transactional value of £4.1 billion ($5.7 billion), this results in an implied market cap of $10 billion for Deliveroo. 

United Kingdom

Deliveroo is a British online food delivery company that connects consumers with local restaurants, grocery stores, and retailers through its online platform and mobile app. The company offers on-demand delivery services, including restaurant meals, groceries, and retail products, and operates a subscription program called Deliveroo Plus. Deliveroo also utilizes 'dark kitchens' (Deliveroo Editions) for delivery-only meals and provides data insights to partner businesses to optimize their offerings. Headquartered in London, United Kingdom, Deliveroo was founded in 2013.

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Deliveroo (ROO LN)

Deliveroo part 7 - Valuation

£8bn at the mid-point… that’s pretty high. That prices the company on a much higher valuation than $DASH on a comparable accounting perspective

Newmoon Capital

Deliveroo IPO: Plagued With Intense Competition

Deliveroo’s track record regarding its financial discipline is not that great. The company has raised around £0.9bn over seven funding rounds...

Oshadhi Kumarasiri

Deliveroo Part 6 - White Label Killed the Delivery Star

Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10...

Newmoon Capital

Initial Thoughts on the Deliveroo IPO

Deliveroo IPO is expected to be one of the biggest IPOs in the U.K. this year. The company's market cap post IPO could be nearly $7 billion to $10...

Douglas Kim

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