Takeout service Delivery Hero eyes $500 million IPO

Isaac Cain
June 7, 2017

The German online food-delivery service will comprise newly issued shares from a capital increase and the sale of some existing shares from the holdings of current investors.

BERLIN/FRANKFURT, June 6 (Reuters) - Online food takeaway firm Delivery Hero is preparing a flotation that could value one of Europe's largest internet startups at up to 4 billion euros ($4.5 billion), raising funds to help it fend off new competitors such as Uber and Amazon.

Approximately 35% of the share capital of Delivery Hero is now indirectly held by Rocket Internet SE and approximately 10% is held by South African company Naspers.

Delivery Hero wants to have a strong net cash position so it can be prepared to grow both organically and through possible further acquisitions, Chief Executive Niklas Ostberg said.

German Delivery Hero, which owns meal delivery service Foodora and several other companies, will head to the stock exchange, which should attract 450 million euro.

If Delivery Hero does go public indeed, it would the first listing by a Rocket Internet-backed company since Rocket Internet itself listed in 2014.

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The Berlin-based company says the IPO "is expected to take place in the coming months, subject to market conditions".

Roughly half of Delivery Hero's loss before interest, tax, depreciation and amortisation of €116mil (RM557mil) a year ago was due to ramp-up costs, including heavy marketing, for its Foodora unit which delivers from high-end restaurants.

The company targets gross proceeds of about 450 million euros from newly issued shares, Delivery Hero said.

Delivery Hero was founded in 2001 and acts as an online platform for the delivery of meals from over 150,000 restaurants.

Takeaway and Delivery Hero have been locked in a fiercely competitive battle, especially in Germany, which is an important market for meal delivery services.

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