Deliveroo IPO … and the ASX stock that reminded people about healthcare

By Jonathan Jackson. Published at Mar 12, 2021, in Features

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Deliveroo is launching its IPO on the London Stock Exchange.

While the date is yet to be announced, the company is eyeing a $10BN valuation, which could make it the largest IPO in the UK in 2021.

If it debuts at the top of its target range, it’s market cap could be a cool $7BN.

Deliveroo was founded in the UK, but you’d be blind if you haven’t seen a delivery bike dropping food off around your local CBD.

Deliveroo operates in nearly 800 towns and cities across 12 markets, including Australia, Belgium, France, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, United Arab Emirates, Kuwait and the United Kingdom.

Deliveroo has a good position in the UK food delivery market: the overall market value increased from $4.80B to $5.90B over the last year, while Deliveroo's market share went up from 22% to 33%.

It’s certainly not a bad industry to consider investing in, according to IMARC Group the global online food delivery market size is projected to exceed US$164.5BN by 2024, expanding at a CAGR of 11.4% during 2019-2024.

Deliveroo has done something interesting with their IPO, something that would certainly garner interest in it.

The company made £50m of shares available to its customers in its forthcoming IPO as part of a community offer.

Any Deliveroo customer who placed a Deliveroo order is able to register their interest in applying for shares in any future floatation via the company’s app.

Once the float is confirmed, if it is confirmed, Deliveroo customers will be able to apply for up to £1,000 of shares.

“Far too often normal people are locked out of IPOs, and the only participants are the institutional investors. I wanted to give as many customers as possible the chance to become shareholders,” Deliveroo founder and CEO Will Shu said.

Riders will also be rewarded, with the delivery giant setting aside £16m in cash to be made available on the day of the listing.

Payments of £10,000, £1,000, £500 and £200, or local currency equivalents, will be made available to riders with tenure of at least one year and completed at least 2,000 orders.

“I want to thank our riders who have been working with us for years, delivering great food and such a fantastic experience for our customers. They have been central to our growth and will continue to be. Some of these riders have been with us since the start and I’m delighted that they can share in the excitement of the company’s next chapter,” Shu said.

Should be an interesting listing.

The ONE ASX stock to watch

Healthcare providers accelerated their use of technology during COVID-19, with the focus on digital health becoming a global trend.

The underlying benefits of moving to digital health resources are many, but primarily this would alleviate the burden on undermanned or under resourced health providers, while cutting costs and still caring for patients.

OneView Healthcare plc (ASX:ONE) has taken this to heart.

ONE is a health tech company that provides hospital patients a “virtual care and digital control centre” at their bedside to deliver the best possible patient experience during their stay.

ONE is a software platform sold as a yearly license fee per hospital bed. The pandemic has accelerated the uptake of this platform.

In fact its control centre, is currently used in 9,259 hospital beds around the world, including three of the top 20 hospitals in the USA.

It also has major partnerships in the bag including with Microsoft and their healthcare offerings.

And it recently announced a distribution agreement with Samsung...

Interestingly, ONE currently has $7.85M in Annual Recurring Revenue (ARR) - and is projecting 45% growth this year, however does not factor in any future revenue from Samsung.

ONE finished the week strongly, starting Friday at 11.5 cents and finishing at 16.5 cents, a whopping 106.25% gain.

READ: Our New 2021 Tech Pick of the Year

The best and worst performing sectors this week?

In yet another flat week, Consumer Discretionary has led the way up over 2 per cent followed by Industrials up over 2 per cent and Utilities up over 1 per cent. The worst performing sectors include Energy down over 2 per cent while Information Technology and Materials are down over 1 per cent.

The best performers in the ASX/S&P top 100 stocks include Treasury Wines Estates up over 11 per cent followed by Appen, which is up over 10 per cent after Director, Mark Brayan, increased his shareholding by exercising some of his performance rights. That said, while the price rise on Appen looks good, I believe there is further downside for this stock. Aristocrat is also up strongly, rising over 8 per cent.

The worst performers include Santos, which is down over 7 per cent followed by Fortescue Metals down over 5 per cent and The a2 Milk company, which is down over 4 per cent.

What's next for the Australian share market?

Wealth Within’s Dale Gillham says, “I feel like a broken record, given that we have experienced another flat week on the Australian market and a flat start to the year with the All-Ordinaries Index rising less than 2 per cent since 1 January. It has also fallen over 3 per cent since the high on 17 February and it is not looking strong in the short term.

“It will be interesting to see where the Australian stock market closes on Friday, given that over the last two weeks it has closed around 6,940 points. If we see a low close on Friday again, it will add further weight to my prediction that the market is falling into the low I was expecting a few weeks ago. Although, as I said last week, we need confirmation of this, which will occur if the market trades below 6,770 points.

“It is possible that the market will break out of the pattern it is currently in very soon, and if the move is down, we need to be prepared for the fall to unfold over four to six weeks into mid-April and for the market to trade down to below 6,500 points. As I have stated previously, now is not the time to be entering the market, as investors would be better off waiting for the next confirmed run up.”

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