Home news Giant SoftBank fund eyes stake in Deliveroo

Giant SoftBank fund eyes stake in Deliveroo

17
0


A giant technology fund backed by Apple and the Saudi Arabian state is in talks to buy a stake in Deliveroo, the British food delivery service which has been at the centre of controversy over its treatment of workers.

Sky News has learnt that the $93bn SoftBank Vision Fund, which was launched late last year, is in detailed talks with Deliveroo about participating in a big fundraising being planned by the company.
Sources said this weekend that SoftBank was “very interested” in buying a stake in Deliveroo but cautioned that a deal could be some weeks from being finalised.
The delivery app’s latest funding round could see it raise a similar sum to the $275m it attracted from investors nearly a year ago, according to insiders.
The valuation that would be attributed to Deliveroo by its new fundraising would see it smash the £1bn barrier that leads to tech companies being labelled as ‘unicorns’, they added.
One source said on Saturday that the company’s valuation could reach £1.5bn after the next phase of investment.
If SoftBank’s Vision Fund – which was set up to take big stakes in emerging technology companies – does proceed with the deal, it would be the Japanese group’s latest big British investment.
Last year, it paid £24bn to acquire ARM Holdings, the chip designer, which represented the belief of SoftBank’s founder, Masayoshi Son, that the ‘internet of things’ will shape much of the world’s future consumer behaviour.
SoftBank has also forked out billions of dollars to buy stakes in companies as diverse as a big Chinese ride-hailing app and Nvidia, a US chip-maker.
News of the latest financing plan at Deliveroo comes just weeks after it bowed to pressure by overhauling the “supplier agreement” it uses to set out the terms on which thousands of couriers are employed.
Deliveroo, which handles takeaway orders for restaurant chains such as Byron, PizzaExpress, Rossopomodoro and Wagamama, has become one of the most prominent consumer brands in the UK.
Assuming its latest fundraising is completed, it will cement its ranking as one of the most valuable technology start-ups to emerge from Britain.
That would make its co-founder and chief executive, Will Shu, one of the UK tech sector’s wealthiest entrepreneurs – on paper, at least.
Deliveroo now operates in scores of cities around the world.

Its rapid growth has, however, also prompted growing scrutiny of its treatment of about 15,000 delivery riders in the UK.
The company recently removed a stipulation in earlier contracts saying that couriers could not challenge their self-employed status at an employment tribunal.
Its new employment document also includes the explicit clarification that couriers can work for other companies at the same time as they undertake work for Deliveroo – a key change that MPs had urged in a critical report on the so-called “gig economy” earlier this year.
It also says that riders will no longer be required to give Deliveroo notice of their intention to stop working for it, although the company will still give one week’s notice if it wants to terminate its agreement with riders.
Like companies such as Uber and Hermes, the parcel delivery firm, Deliveroo has found itself in the crosshairs of critics who argue that they are riding roughshod over their workforces by refusing to treat them as employees.
Labour pledged before the General Election to ban zero-hours contracts and give all workers the right to have access to trade union representation.
Matthew Taylor, a former policy chief under Tony Blair, has been asked by the Government to produce a report on workers’ rights, which is expected to include a recommendation that companies should pay a premium wage to staff employed on zero-hours contracts.
It emerged in March that a group of 20 Deliveroo couriers were drawing up plans to challenge the company’s assertion that they are self-employed contractors in a bid to obtain employment rights such as the minimum wage, sick pay and holiday entitlement.
Deliveroo last raised money in August 2016 from investors including Bridgepoint, the private equity group, and General Catalyst Partners, a US-based firm.
The company is widely expected to seek a public listing at some point in the future, although it faces stiff competition in its home market from the likes of UberEats, Just Eat and Amazon.
Earlier this year, it appointed Thea Rogers, a former aide to George Osborne, to a top management role.
A Deliveroo spokeswoman said this weekend that the company did not comment on speculation, while a spokesman for the SoftBank Vision Fund declined to comment.

Source: SKY News