Charlotte Street Partners



Will Shu Deliveroo?

Written by Li-Ann Chin, associate 
Edited by David Gaffney, partner
31 March 2021

Good morning,

Research by The Bureau of Investigative Journalism has revealed that one-third of Deliveroo employees earned less than the adult minimum wage of £8.72 per hour, while the lowest paid worker received a measly £2 an hour. There are rumours that hundreds of riders plan to strike on 7 April, the day of Deliveroo’s feverishly anticipated Initial Public Offering (IPO). Conditional dealing in the company’s shares got off to a bad start on its debut this morning, tumbling more than 25% from their 390p opening price.
Deliveroo’s flotation plans have been a rich source of comment and conjecture for business reporters and City commentators in recent weeks. On Monday, the food delivery group was forced to lower its IPO target valuation by £1bn from £8.8bn to £7.6bn as a result of investor backlash.
Scottish Mortgage, Britain’s leading technology backer, became the latest City investor to join the likes of Aviva, Aberdeen Standard Investments, M&G and Legal & General, in shunning Deliveroo’s IPO on the London Stock Exchange.
Institutional investors have voiced concerns around the company’s dual-class share structure which would see founder Will Shu retain shares carrying 20 times as many votes as those of other investors. Aberdeen Standard Investments pointed out, “We would have no power to do anything. The CEO could run the business however he likes for years.” I suspect there is also something about Shu’s £500m stake – in contrast with a driver’s hourly pittance – that doesn’t sit right with some investors. 
In any case, you can see why investors are reticent. It is true that the company has done well in the last six months of 2020, but the current valuation is considerable for a loss-making company – Deliveroo reported a loss of £223.7m last year. With pubs and restaurants set to reopen again in slightly over a month, some are questioning the future demand for food delivery services. Shu has countered that the order frequency of customers still remained high, when the hospitality industry reopened last summer.
Clearly, much more work needs to be done in convincing both retail and institutional investors that Deliveroo is offering up a tasty deal. And with less than a week to go until unconditional trading in the company’s shares is set to begin, investors need to be convinced now.
The clock is ticking.


Tests conducted by the Office for National Statistics reveal that roughly half of people in the UK now have antibodies against Covid, either through infection or vaccination. The study was conducted by taking blood from a representative sample of people around the UK to estimate what proportion of the population has antibodies. As of 14 March, an estimated 55% of people in England, 51% in Wales, 49% in Northern Ireland and 43% in Scotland had antibodies.
Scotland Yard has been exonerated by an independent report over its policing of the Sarah Everard vigil in Clapham Common. The Metropolitan Police force was found to have “acted appropriately” over its handling of the controversial situation a fortnight ago. Matt Parr, the inspector who led the inquiry, said that the Met had faced a complex and sensitive policing challenge, but acknowledged that many would conclude it became a “public relations disaster”. (£)
Tedros Adhnanom Ghebreyesus, head of the World Health Organisation (WHO), said on Tuesday that further investigation is needed to conclusively rule out a theory that Covid-19 originated from a laboratory in China. A report published by WHO and Chinese health experts found that the lab leak explanation was unlikely and that the virus was likely to have jumped from bats to humans via another intermediary animal.

Business and economy

Estimates from the Office for National Statistics today indicate that the UK economy has bounced back more strongly than anticipated in the last six months of 2020. GDP rose by 16.9% and 1.3% in the third and fourth quarters respectively.
According to research conducted by the Institute for Fiscal Studies, the SNP administration in Edinburgh spends a total of 30% more on public services per person than in England, as a result of the Barnett formula. The gap between Scottish government’s funding vs England is reportedly at its widest in 15 years.
As fears for Liberty Steel grow, ministers are under pressure to bring forward the £250m Clean Steel Fund for the UK steel industry, which is originally due to begin in 2023. Liberty Steel, Britain’s third-largest steelmaker, is in desperate need of finances following the collapse of Greensill Capital, its main lender. (£)
The head of Brazil’s army, navy and air force resigned yesterday, rocking a right-wing government that is already facing public fury over President Jair Bolsonaro’s inability to contain the pandemic. The announcement came a day after Bolsonaro replaced six of his cabinet members, including a surprise move to dismiss the defence minister. Political analysts said the firing of Fernando Azevedo e Silva, a widely respected former army general, likely sparked the exit of the military heads. (£)

Columns of note

I’ve always enjoyed wandering around the homeware sections of department stores, reverently stroking armchairs and sofas whilst imagining a future in which I would be the proud owner of both. There is magic in knowing you are in a place where you can, in a very real sense, buy your aspirations. Kitty Drake writes in The Guardian that the disappearance of the high street will rob us of spaces to dream in.
H&M, the Swedish clothing firm, is facing backlash from China after an announcement on its website from last year inadvertently alerted consumers that it was no longer sourcing cotton from Xinjiang, over concerns about the use of Uighur forced labour in cotton production. George Magnus writes in the Financial Times about the profit vs principle debate that companies are now increasingly having to juggle and the difficult decisions they will have to make in prioritising brand trust and corporate governance.

Cartoon source: The Telegraph


What happened yesterday?

Equities in London finished in the green on Tuesday, as investors looked past the Archegos Capital collapse.

The FTSE100 ended the session higher by 0,53% at 6,772.12, while the FTSE 250 closed up 0.65% at 23,574.44.

Sterling hit a 12-month high against the euro, trading 0.04% stronger against the euro, as the UK’s vaccine roll-out continues to outperform countries in the European Union. It, however, remained in a mixed state as Sterling fell by 0.03% against the dollar at $1.3717.

Across the Atlantic, Wall Street stocks closed lower yesterday, as elevated bond yields weighed on sentiment once again. At the close, Dow Jones Industrial Average was weaker by 0.31% at 33,066.96, while the S&P 500 was down 0.32% at 3,958.55. The Nasdaq Composite, on the other hand, closed down 0.11% lower at 13,045.39.

 In company news

 DNA sequencing group Oxford Nanopore has picked London for an initial public offering later this year, making it likely to be one of the largest floats in the UK this year, with analysts valuing it at between £4bn to £7bn.

Uber Boat has been chosen by Transport for London to run a Thames ferry service alongside the closed Hammersmith Bridge. Come summer, the boat service is expected to take up to 800 cyclists and pedestrians across the river between 6am and 10pm daily.

Red Cat, the pubs business run by ex-Greene King chief executive Rooney Anand, is set to buy 42 pubs from Stonegate. The deal follows demands from the Competition and Markets Authority that Stonegate offload some venues after its £1.3bn purchase of rival Ei last year.

What’s happening today?


Aquis Exchange, Gulf Keystone Petroleum, Tricorn


Gattaca, James Halstead


Angus Energy, Blencowe Resou., Bsf Enterprise., Cloudcoco, Ground Rents, Guild Esports., Shoe Zone, Tricorn, Utd.bk (Regs), Various Eat.

Annual report

UK economic announcements

(07:00) Current Account, (07:00) Gross Domestic Product

Int. economic announcements

(07:00) Import Price Index (GER), (07:00) Retail Sales (GER), (08:55) Unemployment Rate (GER), (12:00) MBA Mortgage Applications (US), (14:45) Chicago PMI (US), (15:00) Pending Homes Sales (US), (15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know

Deliveroo nearly started out as ‘Boozefood’, a service that was geared towards delivering food to drunk people at night. (Source: Business Insider)

Parliamentary highlights

House of Commons

The House of Commons is in recess and will next sit on 13 April

House of Lords 

The House of Lords is in recess and will next sit on 12 April

Scottish Parliament 

The Scottish parliament is in recess ahead of the election on 6 May

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