Limited appetite for Deliveroo offer amid low margins, workers rights issues, and governance concerns - expert comment

Professor John Colley, Associate Dean of Warwick Business School and an expert on IPOs, said:

"It is little surprise that investors appetite is limited for the Deliveroo IPO. It is a narrow margin loss-maker that is likely to face higher costs due to worker’s rights across Europe. There are also concerns as to whether this type of business model can ever return much profit. It would have to deliver a lot of meals at high margins of which there is no sign yet.

"Another major issue may well be the governance concerns relating to founder shares voting power. In the UK investing institutes are more concentrated and are used to having a say in changing management if a business is badly run. So being lumbered with a founder they can’t shift however bad the performance will not go well.

"A number of potentially very large investors decided to sit this one out. Those who invested for the price ‘pop’ have paid the price in losses. This does not augur well for future tech or gig economy launches in the UK. Nor indeed SPACs which again are likely to be seen as poor value and high risk by late investors in the UK."