Deliveroops, ludicrous speed grocery deliveries and app-less scooters

Deliveroo becomes “worst IPO in London history”

Deliveroo joined the London Stock Exchange on Wednesday March 31st, in a day the company probably won’t like to look back on. Not only did the company set its opening share price at the bottom of its target range, it also saw its shares collapse 26% on the first trading day. 

What happened?

1. Corporate governance - Deliveroo has a dual-class share structure. In simple terms, it means the founders have more voting rights. This, in theory, allows the founders to concentrate on growing the business rather than on short-term dividends. Very acceptable in the US, this model has not been embraced by European investors, who some stayed away from the IPO.

Bigger picture: the UK government is trying to make the dual-class model more accessible, for the UK to gain advantage over rival EU stock markets (cough, Amsterdam); Deliveroo’s IPO raises questions over the validity of this model. 

1. Questionable business model - in 2020, deliveroo saw ￡1.2 billion revenue (on ￡4.1bn gross bookings) - and had a loss of ￡223M. With 2020 being considered a once-in-a-lifetime gift year for the delivery business, not being able to show profits raises questions about the entire business model. It isn’t just Deliveroo’s challenge, it is an industry-wide one. 
2. Pressure on the gig economy employment model. Uber just recently switched its drivers to ‘worker’ status, after losing a supreme court case in the UK; while the ruling does not affect Deliveroo, there is growing international pressure from courts and politicians to amend the gig-economy employment model in favour of employees. This could only make things much worse for the finances of delivery companies. 

More on the FT & Tech Crunch. In other UK companies IPO news, Arrival is listing on the Nasdaq, valued at $13bn, and Cazoo is listing on the NYSE, valued at $7bn. 

Ludicrous Speed grocery deliveries

I don’t know how many times you needed groceries delivered to your doorstep in 10 minutes or less, but I guess a lot, as this market is booming. 

Turkish Getir, who recently launched in London with a 10 minute delivery proposition, recently reached unicorn status. Getir is competing with Weezy, a UK 15(!) minutes grocery delivery services which just expanded to Bristol. Both are also competing with Dija, another UK 10(!) minutes service, who recently bought Genie, a Cambridge-based delivery service. 

That’s not all. Those fellows are up against mighty Gorillas, German 10(!) minutes service which recently raised $290M and is now not only a Gorilla, but also a Unicorn. I hope Jiffy - a UK 15(!) minutes service which just raised $2.6M - can hold up to that. After all, Zapp, a US 20(!) minutes service, raised $100M.  All are active in London. 

Micromobility: Lime is rolling out new features: booking without an app, free vehicle reservation up to 10 minutes and closest vehicle recommendation; all designed to increase utilization of Lime’s services. Bird is investing $150M in its European expansion. The company will add more than 50 new cities and will strengthen its presence in existing cities. Tier is joining the ITF board. 

Ride-hailing: Uber launches ‘Uber Green’ in London. In zone 1, you can now summon an electric car, with no extra cost. Well, if you ignore that since January 2019 Uber has been collecting a 15 pence per mile clean air fee from all of its riders. But now it's free. Minus the 15p per mile. In Petersborough, Bolt is launching and promising carbon neutral travel. Didi is preparing for an IPO in Hong Kong, targeting a $60 billion valuation. The company just announced it is entering South Africa, taking on Boly and Uber. Hyundai has its own DRT service. 

Blacklane, a German chauffeuring startup, raised 22M Euro. The company was hit hard during the pandemic, wiping off 99% of its 10M Euro monthly revenues. The round was all from existing investors, and the total sum raised by the company stands at over 100M Euro.

Flying cars: Lilium $830M SPAC and introducing a 7 seater… ahh… minibus? Volocopter 52 pages white paper on urban air mobility. 

VIA is all over the place. Piloting autonomous vehicles in the US. Also VIA logistics. Aimed at last mile delivery, it embraces the idea that people and goods aren’t that different. Yandex autonomous vehicles reached 10 million kilometers and there is an informative celebratory blog post. Google “green” maps - google is working on an algorithm that will use AI to show car users routes that minimize carbon footprint. 10 most innovative transportation companies of 2021. I was familiar with only four.  

Long reads from the New York Times: the big problem with electric-cars is that they are cars; the even bigger problem with people walking and looking at their phone at the same time. Only slow-walkers are a bigger problem.