Deliveroo's story is one of the most instructive in recent UK venture history — not because it was a simple success, but because it illustrates the complexity of private company investment and the difference between paper returns and realised returns.
The early EIS rounds
Deliveroo was founded by Will Shu and Greg Orlowski in 2013. Early rounds qualified for EIS, giving angel investors and early institutional investors access to income tax relief and the CGT exemption on gains. The company grew rapidly, raising successive rounds at dramatically higher valuations — Series A, B, C, D and beyond — as it expanded across Europe and internationally.
The IPO and its aftermath
Deliveroo listed on the London Stock Exchange in March 2021 at 390p per share, valuing the company at approximately £7.6 billion. The IPO was widely anticipated as a landmark moment for the UK tech ecosystem. Instead, shares fell sharply on the first day of trading and continued to decline over subsequent months, eventually trading well below the IPO price as investors reassessed the unit economics of food delivery.
For early EIS investors who had held through to the IPO and beyond, the outcome depended entirely on when they sold. Those who sold before the IPO in secondary transactions at late-stage private valuations did well. Those who held through the public market decline saw paper gains erode.
The lessons for EIS investors
Deliveroo illustrates several important lessons. First: paper returns in private companies are not the same as cash. A 20x paper gain that requires an IPO to realise is subject to market timing and public market sentiment that private company analysis cannot fully predict. Second: even companies that achieve scale and liquidity events can disappoint if the business model economics are questioned at the point of exit. Third: EIS investors who claimed income tax relief at entry had a lower effective entry price — which cushioned the impact for those who sold below their nominal entry price.
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