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Deliveroo could be worth almost £9bn in its upcoming IPO after the food delivery service set its share price range higher than had been previously expected.

The group announced this morning the sale of its shares in the London flotation would give it a market capitalisation of between £7.6bn and £8.8bn.

The offer will consist of almost 385 million shares set at £3.90 to £4.60 each, with the company’s customers and riders also able to take part in the listing at the London Stock Exchange.

Deliveroo, which will publish its full prospectus later today, expects to raise around £1bn from issuing new shares, as well as stock to be sold by existing shareholders, including founder Will Shu.

Alongside the details of the price range, the company issued a trading update for the first two months of 2021 to show continued strong growth.

The total value of transactions processed on its platform has grown 121% year-on-year at the group level in January and February.

Deliveroo added gross transaction value run rate in the fourth quarter of 2020 amounted to more than £5bn.

The company also said underlying gross profit margin as a percentage of GTV grew from 5.8% in 2018 to 8.8% in 2020, which demonstrated “fast growth underpinned by strong unit economics”.

Despite sales rocketing to record levels during the coronavirus pandemic, the company still made underlying losses of £223.7m last year, which was an improvement on the £317.3m total in 2019.

Shu said this morning: “We are proud to be listing in London, the city where Deliveroo started.

“Becoming a public company will enable us to continue to invest in innovation, developing new tech tools to support restaurants and grocers, providing riders with more work and extending choice for consumers, bringing them the food they love from more restaurants than ever before.

“This will help us in our mission to become the definitive food company. We have seen a strong start to 2021 and we are only at the start of an exciting journey in a large, fast-growing online food delivery market, with a huge opportunity ahead.”

Morning update

Elsewhere it is a quieter start to the week with no grocery updates on the markets to speak of.

The FTSE 100 opened 0.3% lower to 6,692p.

Early fallers included Total Produce, Compass Group, Associated British Foods, McColl’s Retail Group and WH Smith, down 4.9% to 161.6p, 1.8% to 1,452p, 1.4% to 2,379.7p, 1.2% to 32.1p and 1.2% to 1,832p respectively.

C&C Group opened 3.2% higher to 291.5p, while HelloFresh is up 3.1% to €65, and Hotel Chocolat is up 2% to 399.8p.

This week in the City

There isn’t a lot of scheduled news this week for grocery and fmcg.

Fresh from the Morrisons contract expansion, tomorrow brings the McColl’s finals, as well as the latest UK unemployment stats.

US food group General Mills reveals quarterly figures on Wednesday, while catering group Compass issues a trading update on Thursday.

The latest ONS retail sales figures for February round out the week on Friday.