Deliveroo losses widen but revenue continues to rise
Deliveroo has reported another year of soaring sales, but losses also ballooned as the food delivery firm invested in expansion.
Revenue rose 116% to £277 million in 2017 as gross profit grew from £1 million to £64.3 million, according to annual results released on Monday.
But pre-tax losses widened from £129.1 million in 2016 to £184.7 million as Deliveroo counted the cost of what it called “major investments” which totalled £100 million.
The firm justified the loss by pointing out that revenue growth in 2017 outstripped the increase in net losses, underlining Deliveroo’s growing profit margin.
Deliveroo has recently been the subject of intense takeover speculation, with reports suggesting that Uber is preparing a 2 billion US dollars-plus (£1.5 billion) deal for the firm.
The annual results show that Deliveroo’s European operations saw revenue grow 99% year on year, while all other markets booked a rise of 207%.
The company also said on Monday that it now works with 50,000 restaurants and 50,000 riders across the world following its recent launch in Taiwan.
Co-founder and chief executive Will Shu said: “Deliveroo is growing rapidly around the world, driven by our passion to bring amazing food to people whenever and wherever they want it.
“Our growth is matched only by our ambition. We want to become the world’s definitive food company and we have invested heavily in innovation, technology, people and restaurants.”
2017 was also the year in which Deliveroo raised almost 500 million US dollars (£383 million) in funding, meaning it attained “unicorn” status.
A unicorn is a start-up company, usually in the tech sector, valued at more than 1 billion US dollars (£766 million).
The group also highlighted a number of milestones it reached in 2017, including moving into a new head office in London’s Cannon Street, launching Deliveroo Editions and recruiting 300 engineers in the UK.
Among the most popular dishes ordered last year were Le Big Fernand from Big Fernand in Lille, Burritos from Dublin’s Boojum, and the Five Guys Cheeseburger in London.
Earlier this year, Deliveroo announced a radical shift in strategy, going head to head with Just Eat by allowing restaurants to join its platform and have the choice of fulfilling orders using their own drivers.
Previously, eateries had to use Deliveroo’s army of drivers.
“We are changing the way people eat and helping restaurants to expand to new areas and in new ways,” said Mr Shu.
“I am proud that Deliveroo now works with 50,000 restaurant partners and 50,000 riders worldwide, as well as our millions of fantastic customers. I’m looking forward to expanding even further with them in the years to come.”