Morning Report: As we noted in the Daily today, Delivery Hero is getting close to going public. Here’s what you need to know.
Delivery Hero, a German company partially owned by Rocket Internet, intends to debut on the Frankfurt Stock Exchange by selling 39 million shares priced between “€22 to €25.50,” according to SeekingAlpha.
While it’s not a tech IPO based here in the United States, the scale of the offering is notable. Bloomberg reports that at current exchange rates, Delivery Hero could be worth “as much as 4.39 billion euros ($4.9 billion).” If memory serves, that’s a larger debut in terms of initial market cap than every US-listed tech IPO of this year, with the exception of Snap, which still retains first place.
So, the IPO matters because it is a significant liquidity event for many of the company’s investors, employees, and corporate interests in Europe. And, if successful, Delivery Hero’s listing could encourage other European companies to take the plunge into the pool of public capital.
How well could the company do at its proposed valuation? Let’s take a peek.
Here are the firm’s recent revenue results, sourced from its own figures:
- Delivery Hero’s revenue grew 93 percent in the first quarter of 2017, to €121 million, from €63 million in the year-ago first quarter.
- In 2016, the company’s revenue came in at €297 million, up from €166 million in 2015.
So, quick growth both in its most recent fiscal year (2016), and its most recent quarter, the first of its fiscal 2017. Bur what about losses?
Well, CNBC notes the following:
The German firm has not released figures on profit, but CEO Niklas Ostberg told CNBC in an interview in March that the company is not profitable, especially after it acquired rival business Foodpanda last year.
Looking through Delivery Hero’s public notes this morning, Crunchbase News is in agreement. However, the Bloomberg folks are too smart by half, and produced the following:
Great chart, right? Only sorta. The spilled red is “Adj. EBITDA,” or in plainer English, a highly processed metric that strips out all sorts of costs. If the best we have is, in fact, negative earnings before interest, taxes, depreciation, and amortization on an adjusted basis, we don’t know squat.
So, Delivery Hero is growing like heck. But, at what cost? It isn’t clear. And that makes its IPO all the more interesting.
From the Crunchbase Daily:
Delivery Hero seeks $1.1B IPO
- Berlin-based food delivery service Delivery Hero is seeking to raise up to $1.1 billion in an initial public offering that values the company at nearly $5 billion. The six-year-old, Rocket Internet-backed company has previously raised $1.75 billion in venture and private equity financing.
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Walmart buys Bonobos
- Walmart is buying online menswear retailer Bonobos for $310 million in cash. The moves comes as competition between the two leading U.S. retailers escalates, with Walmart expanding its online footprint while arch-rival Amazon picks up brick-and-mortar assets.
VCs put more money in cloud storage
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