Deliveroo set to become a tech 'unicorn' as investors seek a slice | Business
Deliveroo could soon be worth as much as $1.5bn â€" well above the $1bn that leads to tech firms being labelled unicorns â€" with wealthy tech investors now jostling to buy a slice of the takeaway delivery company that relies on an army of self-employed couriers.
The $93bn (£71bn) SoftBank Vision Fund, which is backed by the state investment funds of Saudi Arabia and Abu Dhabi, as well as a host of technology firms including Apple and Japan’s Sharp, is said to be in the talks with Deliveroo, which wants to raise funds to finance expansion.
Last year, Deliveroo raised $275m from investors, taking the amount of cash raised by the delivery app, which was founded by Will Shu, a former investment banker, close to $500m. It is thought the current round of meetings with investors is looking to raise a similar amount.
If Deliveroo secures the predicted injection of funds, the valuation could be as high as $1.5bn, according to Sky News.
This would turn turn Shu into one of the British tech sector’s wealthiest entrepreneurs. Deliveroo’s plans are widely anticipated to include a stock market listing.
Deliveroo could not be reached for comment.
However, while customers benefit from having pizzas, burgers and noodles from chains such as Byron, PizzaExpress and Wagamama delivered to their front door, Deliveroo’s operating model has come under fire. Like other gig-economy companies, such as the taxi-hailing app Uber, Deliveroo uses thousands of self-employed contractors rather than employees, a model saving millions of pounds in holiday pay, sick pay and tax. The workers have no right to the minimum wage.
In April it emerged that managers at Deliveroo had been given a list of dos and don’ts setting out how to talk to the firm’s couriers, using terms that appeared designed to fend off claims the couriers were employees. Couriers should be referred to as “independent suppliersâ€, according to the document seen by the Guardian, and that, instead of hiring riders at a recruitment centre, senior staff should undertake “onboarding†at a “supply centreâ€.
In a key case relating to the future of the gig economy, the Central Arbitration Committee is investigating whether Deliveroo’s drivers are independent contractors, as the company argues, or whether they should be classified as workers with rights to holiday pay, the national minimum wage and collective bargaining via a union.
Matthew Taylor, a former adviser to Tony Blair, who was appointed by the prime minister last year to lead a review into the gig economy, is also due to report back. His report is expected to recommend ways to ensure insecure work is good for workers as well as businesses, with paying those on zero-hours contracts an enhanced minimum wage being one of the mooted remedies.
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