Deliveroo continues to amass losses, even though the meal delivery company achieved a significantly higher turnover last year. The delivery platform expects a negative gross margin for this year as well, but investors do not take that too kindly any more.
Coronabooster stopped working
Deliveroo saw its turnover increase by 57 % to 1.8 billion pounds (2.1 billion euros) last year: especially in the first half of the year, the company was greatly helped by corona restrictions in the catering industry. The values of all orders (gross transaction value) even rose by 70 % to 6.6 billion pounds (7.9 billion euros).
However, the company is lowering expectations for this year: Deliveroo expects to grow ‘barely’ 15 to 25 % in gross transaction value. That is also the growth figure that the meal platform wants to maintain in the coming years. Several factors play into that delay: first of all, the first half of 2021 was a record period due to the corona pandemic, which makes any comparison difficult. The company therefore forecasts a higher growth rate in the second half of the year than in the first half of 2022.
A second factor is the rapidly changing macroeconomic environment, with which founder Will Shu refers to the war in Ukraine. He expects the conflict will have “wider geopolitical and economic consequences”. Moreover, Shu fears inflationary pressures and the loss of corona support measures by the governments. He therefore urges caution, but is confident that he will be able to adapt financially.
Losses go tenfold
Analysts and investors are also increasingly concerned that Deliveroo is still not making a profit, and has no intention of doing so any time soon. The meal and grocery delivery companies do not predict breaking even for the first time until the end of 2023 or in the first half of 2024.
Deliveroo has now posted a loss of 131 million pounds (150 million euros), and that will increase further due to rising costs. And still, this 131 million pounds is actually more than a tenfold increase compared to the 11 million in 2020. The company says it needs to invest more in marketing and technology.
