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Deliveroo backed for putting retail investors on IPO menu

Deliveroo’s IPO will be a big pay day for founder Will Shu

Deliveroo’s decision to extend its forthcoming IPO to retail investors has been welcomed by those campaigning to halt the trend of restricting new issues of shares to institutions.

However, one investment platform has raised a new concern that it will prioritise customers, creating a new level of discrimination among investors.

The Amazon-backed food delivery app is expected to list in the Spring with a value of between £5 billion and £7bn.

It is due to unveil further details on Monday, days after revealing that it had chosen to list in London, where the company was founded in 2013.

It is expected to announce a number of offers to show off its positive message. They include a £50m community fund, spread over five years, to help struggling restaurants pay for meals for vulnerable people, and help some of its 50,000 UK riders buy electric scooters.

Deliveroo founder Will Shu, a former investment banker, said: “Far too often, normal people are locked out of IPOs, and the only participants are the institutional investors,” he said.

“I wanted to give as many customers as possible the chance to become shareholders, which is why we’re making 50 million pounds of shares available to them, alongside our restaurant partners and riders.”

The firm’s thousands of riders will receive payments on a sliding scale from a minimum of £200 to a maximum of £10,000, depending on the number of orders that riders have delivered. The average payout per eligible rider is expected to be £440.

Alex Marshall, president of the IWGB union, which represents gig economy workers, said the handouts to riders did not make up for poor pay and conditions. “This is just another PR stunt by Deliveroo to try and divert attention from a workforce that has been exploited since the company’s inception,” he said.

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