ANNUAL REPORT
2021
deliveroo plc Annual Report 2021
CONTENTS
Strategic report
At a glance
Founder & Chief Executive
Ocer’s letter
Chair’s letter
Operational highlights
Business model
Our investment proposition
Strategy
Key performance indicators
Stakeholder statement
Sustainability review
Operating and strategic review
Financial review
Risk report
Viability statement
Non-financial information statement
People
Governance report
Chair’s introduction
to governance
Board of Directors
Governance report
Nomination Committee report
Audit & Risk Committee report
Directors’ Remuneration report
Directors’ report
Directors’ responsibilities statement
Financial report
Independent Auditor’s report
Consolidated income
statement and statement
of comprehensive income
Consolidated statement
of financial position
Consolidated statement
of changes in equity
Consolidated statement
of cash flows
Notes to the consolidated
financial statements
Parent Company balance sheet
Parent Company statement
of changes in equity
Notes to the financial statements
-Year financial summary
Glossary
Glossary – alternative
performance measures
IBC Company and shareholder
information
AT A GLANCE
HYPERLOCAL
THREESIDED ONLINE MARKETPLACE
OUR BUSINESS IS A
We manage our business on a geographic basis. Our eleven
markets are split into two geographic segments: the UK and
Ireland segment and the International segment, comprising
our business in Continental Europe, Asia Pacific and the
Middle East.
We work with restaurant partners across four key
restaurant segments: global quick service restaurants,
national casual dining chains, independent full-service
restaurants, and takeaways. We also partner with some
of the largest grocery retailers in the world.
WHERE WE DO IT
WHO WE PARTNER WITH
UKI – 54%
UK
Ireland
International
1
– 46%
France
Italy
Belgium
Netherlands
Hong Kong
Singapore
Australia
UAE
Kuwait
Our business split by geography (% of GTV*)
WHAT WE DO
CONSUMERS
21 meal
occasions
We connect consumers, riders and restaurant and grocery
partners across local markets to bring people the food
they love.
We are a global online platform, yet a very local business. Our
consumers, riders and restaurant and grocery partners live
and operate within their local neighbourhoods.
RIDERS
RESTAURANTS
+ GROCERS
1 Exited Spain on 29 November 2021.
* To supplement performance assessment, Deliveroo uses Alternative Performance Measures (APMs), which are not defined
under IFRS. APMs are indicated in this document with an asterisk (*); definitions and further details are provided on page 191.
Strategic report Governance report Financial report
01Annual Report 2021 deliveroo plc
I’m Will, I’m the founder and CEO
of Deliveroo. I started Deliveroo
in 2013 because I wanted a
great delivery experience. I had
one and only one idea, and I was
and continue to be obsessed
about it. I am proudly a top 10
individual customer! My most
frequently ordered dish is the
Spicy Beef Soup from Gogi, a
Korean restaurant in Maida
Vale, London. I also continue to
do deliveries on my bicycle in
West London.
FOUNDER & CHIEF EXECUTIVE OFFICER’S LETTER
EVERYONE
WELCOME
Deliveroo’s business
Deliveroo is a complex three-sided marketplace, involving
consumers (an e-commerce destination), riders (an on-
demand logistics business), and restaurant and grocery
partners (a demand generation platform). Consumers
choose Deliveroo because we unlock a wealth of hyperlocal
choice, at the right price, with fast and reliable delivery.
At Deliveroo, we think about food as content in the same
emotional way that other online platforms think about film
or fashion – and we do so because that’s why consumers
come to the platform. Riders care about flexibility,
earnings and security, and often learning and development
opportunities too. For restaurant and grocery partners,
it’s all about demand and incremental profitability, great
service, and increasingly the ability to tell their story
emotionally – both organically and through paid channels.
Balancing the interests of all three sides of the marketplace
– as well as those of our other stakeholders – is critical to
Deliveroo’s success in the short, medium and long term.
Deliveroo is unusual because it is a global online platform,
yet it is also a very local business. Our consumers, riders
and restaurant and grocery partner live and operate
within local neighbourhoods. A consumer in Bristol doesn’t
care about restaurant selection or delivery speed in
Brighton; a rider in Milan doesn’t think about the earnings
opportunities in Naples; and a typical restaurant or grocery
partner in Marseille isn’t trying to tap into demand in Monza,
Manchester or Melbourne.
I think about our business through the lens of our consumer
value proposition (CVP) at all times. Focusing on developing
the right CVP, neighbourhood by neighbourhood, is our
obsession – and how we run the business. Let me briefly
explain the five pillars of our CVP.
1) Availability – Of course, this starts with whether we
operate in your neighbourhood, but it’s more than that.
Are we open late at night or for breakfast? Do we take
alternative payment methods like Alipay? Do we offer
pick-up as well as delivery?
Will Shu
Founder & Chief Executive Officer
Strategic report Governance report Financial report
02 deliveroo plc Annual Report 2021
2) Selection – This isn’t just the number of restaurants
and grocers we have in the neighbourhood. How many
different cuisine types do we have? How many of these
are outlier restaurants/grocers in terms of popularity?
Do we have a wide price range of restaurants? Do
we have exclusive, amazing content? Do we have the
beloved local Chinese restaurant, the halal butcher and
the most popular grocer in the neighbourhood?
3) Consumer experience – It’s not just about how fast the
delivery arrived; this covers the full customer journey.
How accurate was our timing? How easy was it to track
your order? How was the packaging? It’s also about the
quality of personalisation and merchandising in the app.
Do we know, before you do, what you are looking for? Can
restaurants and grocers tell their story effectively and
emotionally in our app? And occasionally, things can go
wrong. How quickly did we resolve the issue?
4) Price – In the end, this is about perception of value, but
a lot of factors influence that. How is our consumer
pricing in terms of delivery fees? What is the price of the
food itself on the platform – and is it marked up over the
restaurant prices? What is the prevalence and relevance of
promotions? Are you part of our subscription programme
Plus, which unlocks free delivery and other rewards?
5) Brand – To me, this is about what Deliveroo stands for
outside of the singular transaction. Does our brand
resonate with people? Are we seen as ethical?
Some of these pillars are easily quantifiable, others not. But
we try to measure them neighbourhood by neighbourhood,
on a standalone basis as well as against our competitors.
This is our scorecard, and it is how we manage the business
and make certain day-to-day operational decisions in a
decentralised manner. For example, general managers can
decide to encourage more riders to work in an area if rider
supply is too low. They can choose to offer a famous local pizza
restaurant an exclusive contract. They can push hyperlocal
in-app discounts, or build a hyperlocal consumer reactivation
campaign to get the flywheel spinning quickly again.
Guided by this report card, we improve over time by grinding
out daily gains, as well as making step-change advances
through long term innovation. Technology is key to both. We
are continuing to improve things we’ve been working on
for years: how long it will take a restaurant to prepare an
order, which rider to assign to collect it, what restaurants
to show to a customer first, how to match rider supply with
demand in real time, which consumer acquisition channels
are most effective. We are also focusing on questions that
have become priorities more recently: how should the user
interface differ for restaurant versus grocery orders, when
should we show upsell items, which orders can be batched,
how best to pick a grocery order, how to build a high quality
advertising platform that brings value to all sides.
These questions are all answered with technology, each
involving teams of data scientists, product designers and
software engineers, to name but a few. They are frequently
hard questions with complex answers. For example, in
the early days our rider assignment algorithm was a
simple ‘greedy solver’ where the closest available rider
would receive the order; now we use deep learning to
predict future network states and advanced optimisation
techniques to decide rider assignment, and we have vastly
more data on which to train our models. This illustrates why
Deliveroo is at its heart a technology company, and why
we’re continuing to invest in our technology team.
Our technology and our operational teams are key to
executing on a hyperlocal basis. This is how we gain market
share in each neighbourhood. This is critical to generating
attractive financial returns. As for any company, overall
scale helps to spread marketing costs and overheads.
But in our business, hyperlocal network effects are more
powerful than overall scale, and network effects come from
hyperlocal market share. Improving and winning local market
share positions yields outsized unit economics, and unit
economics is the key to overall profitability.
Profit pool potential is a function of population density,
affluence, restaurant and grocery partner supply, and our
local market share. Not every neighbourhood is created
equal in terms of potential, but we believe the vast majority
of neighbourhoods in the markets where we operate have
the fundamental demand and supply characteristics to be
profitable. Just how profitable depends in large part on the
strength of our local market position. In the UK, for example,
we believe over 70% of our Gross Transaction Value (GTV*) is
in neighbourhoods where we are number one in terms of
market share. We will aim to increase this percentage across
all our markets, and we will consider exiting neighbourhoods
where we cannot achieve this position.
We operate in a very competitive market, so how do we
maintain durable advantages? Part of it comes down to the
day-to-day execution that I already described – which is
becoming increasingly automated over time. Alongside this
is the combination of long-term vision with the curiosity to
innovate and the willingness to adapt. How do we decide
what new verticals or businesses to enter?
I start by looking through the lens of the three sides of
the marketplace. These are really three core assets in our
business: (1) monthly active consumer (MAC) base; (2) rider
base; and (3) restaurant and grocery partner base. New
verticals or businesses are best if they involve at least
two sides. For instance, Signature, our white label business,
makes sense because we can engage both the partner base
as well as the rider base. Grocery has allowed us to leverage
our MACs as well as our rider base. Editions has allowed us
to utilise all three! Initiatives that only involve one side of the
marketplace can be beneficial, but are less obvious.
Hopefully this provides an understanding of how I think
about the business, and how we make decisions to enter
new areas.
* To supplement performance assessment, Deliveroo uses Alternative
Performance Measures (APMs), which are not defined under IFRS. APMs are
indicated in this document with an asterisk (*); definitions and further
details are provided on page 191.
Strategic report Governance report Financial report
03Annual Report 2021 deliveroo plc
Share price performance
I’d like to take this opportunity to address our share price.
Our shares were listed on the London Stock Exchange on
7 April 2021. This was an important step for the Company,
as the capital we raised allows us to invest in our business
to create durable advantages that drive long term value
creation. Since the IPO, our share price performance
has been poor and that’s disappointing to me not just
because I’m the CEO, but because I’m the largest individual
shareholder. My interests are aligned with shareholders’ over
the long term and I will continue to do my best to improve
long-term shareholder value.
I acknowledge that it’s been a difficult time for shareholders.
In particular, I pushed very hard to ensure retail investors
would have access to the share offering because I believe
that IPOs should not be open to institutional investors only
and lock out ordinary people. There are a lot of reasons
for the disappointing performance, some related to the
business, some related to the industry, and some related to
the macro environment. Broadly speaking, I am focused on
the business, because that’s all I can control. But like you as
fellow shareholders, I am interested in creating long term
value. I am hiring, motivating and retaining the best team I
can to execute on our hyperlocal CVP and to innovate where
we think is appropriate, so that we drive the business to
profitability and deliver sustainable growth.
Business progress in 2021
From a business perspective, I am proud of our performance
in 2021. We grew very quickly, across all of our markets. Full
year GTV* was up 70% year-on-year in constant currency*.
This was at the top end of our guidance for 60-70% growth,
and we had actually increased that guidance twice
during the year. Particularly encouraging to me was our
performance in the UK, where we continued to grow our
market share in a competitive environment. This shows the
strength of our CVP, as well as great execution by our UK and
Ireland (UKI) team. Having expanded UK population coverage
to 77% at the end of 2021 compared to 53% at the end of
2020, we believe we are well placed for continued growth
and market share gains.
We were early to the on-demand grocery opportunity, and
in the last three years we have built a leading position in the
segment. In 2021, we continued to grow this business rapidly
and it reached 8% of Group GTV* in 2021. We had over 11,000
partner sites live globally at the end of 2021 (compared to
~7,000 at the end of 2020). In late Q3 we launched Deliveroo
Hop, a new rapid grocery delivery service operating from
delivery-only stores (often called ‘dark stores’). We’re in the
early stages of developing this model, and are currently
operating Hop with several different partners in the UK and
Italy as we continue to test and learn with this new model.
Since 2017, consumers have been able to unlock access
to unlimited free delivery for a fixed monthly fee through
our Plus subscription programme. Plus provides great value
for consumers, and because it drives higher retention and
frequency, it helps to increase customer lifetime value for
Deliveroo. In 2021, we made a big step forward in broadening
the programme. In Q1 2021, we launched a new ‘Silver’ tier of
the programme designed for families. Strong initial take-
up has been further boosted since September, when we
partnered with Amazon to allow all UK and Ireland Amazon
Prime members to sign up for free Deliveroo Plus Silver
membership for a year. Overall, I was really pleased to see
the strong traction of Plus with consumers in 2021, and by
December 2021 our total number of Plus subscribers in UKI
was up four-fold compared to the year before.
We continued to scale other category innovations that
are driving long term differentiation of the CVP. Editions is
our delivery-only kitchens concept that allows restaurant
partners to bring their brands to new neighbourhoods
without needing to open a new dine-in location. From our
perspective it’s quite simple: how do we bring the best and
most relevant content to areas that lack it? Restaurants
also use Editions even in areas where they have an existing
restaurant: delivery-only kitchens allow them to separate
and optimise their dine-in and delivery operations, and their
P&L profile benefits from the lower-cost real estate footprint
and lack of front of house. I’m excited that we accelerated
the roll out of Editions during the course of 2021, adding
FOUNDER & CHIEF EXECUTIVE OFFICER’S LETTER CONTINUED
1. Compelling structural growth
Over £1 trillion global TAM; Low online
penetration; Favourable structural shift
in consumer demand
2. Winning competitive differentiators
Distinctive value propositions for
consumers, partners and riders; Investing
in innovation; Efficient logistics
3. Driving to profitability
Stable cohorts; Strong capital position;
aim to reach 4%+ adjusted EBITDA margin (as
% of GTV)* by 2026
4. Building sustainable futures
Reducing carbon and waste; Helping
partners to grow and thrive; Creating an
inclusive marketplace
Read more on page 18
OUR INVESTMENT PROPOSITION
* To supplement performance assessment, Deliveroo uses Alternative
Performance Measures (‘APMs’), which are not defined under IFRS. APMs
are indicated in this document with an asterisk (*); definitions and further
details are provided on page 191.
Strategic report Governance report Financial report
04 deliveroo plc Annual Report 2021
over 100 kitchens in the year with approximately half of
these opening in Q4 2021, and bringing brands like Dishoom,
Five Guys, Shake Shack and Pho to new neighbourhoods.
During the year, we took the difficult decision to end our
operations in Spain, reflecting our intention to focus
investment and resources on the Company’s other markets.
We had determined that achieving and sustaining a top-tier
market position in Spain would require a disproportionate
level of investment with highly uncertain long term potential
returns. The decision took effect in November 2021, and
I want to thank again all the riders and restaurants who
have worked with Deliveroo in Spain, as well as our fantastic
consumers and of course the Deliveroo team in Spain.
Back in 2013, I was the very first rider for Deliveroo and
worked doing deliveries full time for the first year of running
the business. I still complete deliveries regularly today, as do
many team members right across Deliveroo. This first hand
understanding of what riders care about most has helped
us develop an offer that prioritises the things they value:
flexible work, good earnings, and security.
Deliveroo has provided riders with free and automatic
accident and injury cover and third-party liability insurance
since 2018. During Q3 2021, we extended this free insurance
in several markets to provide riders with enhanced
protection. The new insurance coverage includes earnings
support for riders working regularly with the company who
are unwell and unable to work for more than seven days
(backdated to day one). In addition, this insurance now
entitles qualifying riders to a one-off lump sum payment
following the birth or adoption of a child. We are currently
exploring extending these enhanced entitlements to
additional markets.
To support the tremendous growth in our business, I was
really pleased to welcome many new colleagues to Deliveroo
this year. Amongst the new starters were two additions
to the Executive Team: Eric French joined in January 2021
as Chief Marketplace Officer and in September 2021 he
was followed by Devesh Mishra, our new Chief Product and
Technology Officer. Both Eric and Devesh have made a real
impact already. The whole team is excited about executing
on the opportunities we have ahead of us.
Focus areas for 2022
A key focus for the company this year and beyond is making
progress on our longer term path to profitability. Deliveroo
was profitable on an adjusted EBITDA* basis in H2 2020.
In 2021, our unit economics were impacted by two factors.
First, we experienced a reversal of the benefits seen from
higher basket sizes during COVID-related lockdowns. Second,
we increased investment in order to capture growth
opportunities. Investment had been lower in 2020 in part
due to capital constraints related to the CMA investigation
connected to our Series G funding round and also uncertainty
around COVID-19 in the first half of 2020. In late 2020, we
began to increase investment in acquisition and retention
of consumers and in brand-building marketing, as well as in
WE STILL SEE PLENTIFUL OPPORTUNITIES
TO FURTHER INCREASE OUR REVENUE
‘TAKE RATE’, TO CREATE AN EVEN MORE
EFFICIENT LOGISTICS NETWORK, AND TO
GENERATE TECHDRIVEN EFFICIENCIES
IN OWN OPERATIONS THAT WILL DRIVE
OPERATING LEVERAGE AS WE SCALE.”
headcount additions, especially in technology. As a result, in
2021 we grew GTV* by 70% (in constant currency*), while our
gross profit margin (as % of GTV)* fell by 120 bps and our
adjusted EBITDA margin (as % of GTV)* declined to (2.0)%.
Going forward, I am very focused on delivering on our path to
profitability. For 2022, our guidance is for an adjusted EBITDA
margin (as % of GTV)* in the range of (1.5)-(1.8)%. We aim to
reach breakeven at some point during H2 2023–H1 2024
on an adjusted EBITDA* basis. And by 2026, we aim to reach
a 4%+ adjusted EBITDA margin (as % of GTV)*, with further
upside potential beyond 2026.
This year we will make progress across a range of levers
underpinning our path to profitability.
The largest component of our revenue is commissions from
restaurant and grocery partners; and this is a function of
average order value (AOV)* and the percentage commission
rate. Before this year, we hadn’t really actively managed AOV*,
but we are working on managing minimum order values more
effectively, and upselling is a big opportunity where we can
also learn from other online businesses who already do this
very successfully. In addition, the AOV* for grocery is already
slightly higher than for restaurant delivery offering, and we
see scope to move into higher basket sizes here over time.
On commission rates, we don’t expect significant upwards
or downwards movement on segment-level commission, but
we may be impacted by mix shifts as, for example, grocery
becomes a bigger part of our business.
Consumer fees are another key revenue lever. These are
the amalgamation of delivery and other consumer fees (e.g.
service fee, small order fee) along with subscription revenue
from our Plus programme. Since we started in 2013, we have
modestly increased our consumer fees, but I’m the first
to admit that we didn’t always approach this in the most
structured way. In fact, we are still early in the process of
optimising pricing across all the elements of consumer fees.
But, as with most things, I always start from the perspective
of the consumer – how do we keep providing each individual
consumer with more relevant content that ultimately
increases their willingness to pay?
* To supplement performance assessment, Deliveroo uses Alternative
Performance Measures (‘APMs’), which are not defined under IFRS. APMs
are indicated in this document with an asterisk (*); definitions and further
details are provided on page 191..
Strategic report Governance report Financial report
05Annual Report 2021 deliveroo plc
FOUNDER & CHIEF EXECUTIVE OFFICER’S LETTER CONTINUED
Focus areas for 2022 continued
Advertising revenue is a small part of our current model but
a big opportunity. This comprises sponsored positioning for
our restaurant partners as well as partnerships with fast-
moving consumer goods (FMCG) companies on the grocery
side. This is a proven opportunity for online platforms
and already represents a meaningful part of revenues
for certain players. We see a lot of potential to grow this
revenue channel, but it’s super important to do this in the
right way. As I said before, consumers care a lot about the
quality of personalisation and merchandising in the app, and
restaurants and grocers want to tell their story effectively
and emotionally. If we get this right, we can both grow
this revenue stream and actually improve the consumer
experience in the app. This is something I spend a lot of time
thinking about.
On cost of sales – comprising delivery costs, credit card
fees, and other direct costs – we have consistently gained
efficiency in the past. On delivery, a key measure is the
rider experience time (‘RET’), which is the amount of time it
takes between a rider accepting an order and delivering it
to the consumer. We see plenty of opportunity to reduce
RET further – by cutting riders’ wait time at restaurants, for
example – allowing us to gain efficiency, riders to benefit
from being able to take on more orders and increase their
earnings, and consumers to receive their orders faster.
In the area of marketing and overheads*, we will continue
to make investments to support the growth of the
business. But I’m extremely conscious that as we do this,
these investments need to drive benefits across the P&L.
Technology is a good example. We think of investments
here as building assets that: (i) drive direct financial
benefits, through revenue generation (such as advertising
platforms) or cost reduction (like self-serve capabilities for
consumers, riders and restaurant and grocery partners); (ii)
provide the enabling technology for particular businesses
(an example is Deliveroo Hop delivery-only stores); and (iii)
provide supporting infrastructure for scaling the business
efficiently (such as platform stability, or forecasting models
for consumer demand and rider supply). The quality and
effectiveness of the solutions, products and machinery we
develop are a direct output of the quality and experience of
people we hire and develop.
Delivery-only grocery stores, or dark stores, are an example
of how we think about both the consumer value proposition
and the path to profitability at the same time. During 2021,
we witnessed an unprecedented amount of capital enter
the dark store grocery space — with $18 billion raised
across over 100 deals, according to one study. We’ve
watched this space closely for quite some time, and we
have begun building our own delivery-only stores.
We are well positioned in this segment, and actually all
three sides of our existing marketplace contribute to that.
We have eight million monthly active consumers already
on our platform. We have an existing logistics network of
over 180,000 riders. And we have strong relationships with
grocers, who recognise our record on innovation and want
to work with us to help them figure out this fast-moving
landscape. We understand the consumer proposition of
delivery-only stores is very good, both in terms of stock
accuracy and delivery speed. But it’s not crystal clear
to me that this is a profitable product at scale and on a
fully-allocated basis, so we are monitoring this closely
and being prudent about our rollout plans. Ultimately, we
expect the on-demand grocery space to be served by a
mix of delivery-only stores and store-picked approaches,
and we’re excited about how well positioned we are to be
successful with both models.
I’ve always thought of Deliveroo as an online food platform,
but as our grocery business scaled, I noticed consumers
were purchasing a lot of non-food items, such as household
essentials. I was previously a bit doubtful that consumers
would want something non-perishable very quickly, and be
willing to pay a premium for that service. The evidence would
indicate that I was wrong. As I have already noted, building
and maintaining durable competitive advantages depends
in part on the curiosity to innovate and the willingness to
* To supplement performance assessment, Deliveroo uses Alternative Performance Measures (‘APMs’), which are not defined under IFRS.
APMs are indicated in this document with an asterisk (*); definitions and further details are provided on page 191.
1 Spain discontinued operations are excluded in 2020-2021 but included for 2018-2019.
2026
4%+
(1.5)–(1.8)%
2022
Reach
breakeven
during
period
H2 2023 –
H1 2024
Further
upside
potential
Beyond 2026
(12.3)%
2018
(9.0)%
2019
Adjusted EBITDA margin (% of GTV)*
1
2018-2021: actuals
2022 onwards: guidance
(0.3)%
(2.0)%
(3.2)%
2021
(0.8)%
0.7%
2020
(1.6)%
Strategic report Governance report Financial report
06 deliveroo plc Annual Report 2021
adapt. So in 2021 we launched a partnership with Boots,
the UK’s leading pharmacy, offering 800 health and beauty
products from 14 pilot stores. The results so far have been
very encouraging.
I don’t have a good sense yet of how large the non-food
opportunity is, but in line with the new vertical framework
I laid out earlier in the letter, I expect to launch some exciting
non-food partnerships in 2022. I would note, however, that
we have dedicated nine years to merchandising food – an
emotional product – well online. Doing this in a completely
different category will be exactly that: completely different.
So just as with delivery-only stores, we will monitor progress
closely and take a prudent approach to expanding in
this space.
Challenges in 2022 and beyond
As I just laid out, we have a lot of opportunities to focus on
in 2022. At the same time, there are some areas of concern
I have looking out over the next 12-18 months. In 2022 and
beyond, the European consumer will face some headwinds.
Consumer price indices look set to be high for some period
of time. Inflationary pressures had been building in recent
months; this has been exacerbated by the conflict in
Ukraine, and the broader geopolitical and economic impacts
of this crisis are only just beginning to be felt. Coupled with
interest rate rises, consumers will be operating under a
different spending environment in the quarters ahead. How
this impacts consumer staples and discretionary categories,
and where delivery of restaurant food and groceries fits into
that environment is not clear yet. This is something we will
follow closely.
After operating against the backdrop of COVID-19 for an
extended period, many markets have been out of full COVID
restrictions for about a year. Our view is that COVID-19 was a
catalyst to accelerate the existing trend of adoption in the
online food delivery category and it is encouraging that our
consumer base has remained engaged after the widespread
removal of restrictions. For example, average order
frequency across our UKI cohorts in Q4 2021 was higher than
in Q4 2020. Despite these recent datapoints, we will wait and
see how cohorts acquired over COVID-19 behave over the
long term. We also expect new user acquisition to be more
difficult and costly than during COVID times.
An inflationary environment will also impact the other sides
of our marketplace. Restaurant and grocery partners will
face challenges from rising costs across a range of inputs,
including food, fuel and labour. Higher fuel prices will affect
many of our riders, despite the vast majority of orders being
delivered on two-wheel vehicles. We will need to monitor all
of these impacts closely and ensure that consumer pricing
adequately reflects this reality.
Most critical to achieving both the neighbourhood-
by-neighbourhood improvements as well as long term
innovation is the team we have and continue to build at
Deliveroo. Internally, we are very focused on our hiring plan
especially for developers, product managers and data
scientists. The market for tech talent is very competitive
– I believe demand is at an all-time high. Hiring the right
people at the right cost is critical for executing well. For us
to reach our ambitions, we will have to make good progress
along this front. Likewise, as we automate more and more
of our business, we have to ensure that our organisational
structure continues to evolve. Given the experience of
the last two years, scaling our business in an uncertain
environment is not new, but it is still a challenge.
While I am cautious about the rapidly changing consumer
environment, overall I am very excited about working with
our leadership team and the whole Deliveroo organisation
to navigate these challenges and capture the opportunities
over the next 12-18 months.
EU Directive on platform work
There has been a lot of attention on European Union
proposals for regulation of platform work, published in
December 2021. The on-demand work Deliveroo offers is still
relatively new and has changed labour markets. Regulation
is in many ways catching up. Our starting point in the debate
on the future of work has always been that we should
give riders what they want, which is flexibility. That’s why
Deliveroo riders are self-employed, and this status has been
confirmed by courts across many of our markets. I welcome
the EU’s objective of providing legal clarity over how self-
employed platform workers should work. Our model is
broadly in line with the direction of travel of the proposals,
which remain subject to further consultation between the
three central institutions of the EU. As this debate develops
in the EU and elsewhere, we will continue to advocate for
changes to the law to enable platforms such as ours to be
able to provide greater security to self-employed workers
free from legal risk.
Final thoughts
As I’ve said before, I never set out to be a founder or CEO
of a public company. But having become both, one of
the most rewarding parts of my role is engaging with the
diverse stakeholders we have at Deliveroo. This includes
consumers, riders and restaurant and grocery partners;
investors, analysts and the media; public bodies and local
communities; and of course, my colleagues in the amazing
team we have here.
I hope that Deliveroo’s first Annual Report as a public
company provides all of our stakeholders with more insight
into what we have delivered in 2021 and where we are
heading next. Despite all we have been through, especially in
the last two years, it still feels to me like we are right at the
beginning of our journey, and I look forward with optimism
and enthusiasm to 2022 and beyond.
Yours sincerely,
Will Shu
Founder & CEO
24 March 2022
Strategic report Governance report Financial report
07Annual Report 2021 deliveroo plc
Hello, I became Chair of Deliveroo in November 2020 and I am
delighted to be writing to you today. It has been a busy year
for the Company and I hope that this, our first Annual Report,
will give you a good understanding of what we have been
doing to grow and develop the business. We have tried to
give you a clear picture of what has gone well, as well as the
areas that we need to work harder on and the opportunities
and risks that we see in the future.
I was a very early customer of Deliveroo when the business
was just starting out, and my family and I have been regular
users ever since. I was delighted to have the opportunity
to meet Will and his senior team in 2020 and I joined the
business because I genuinely believe in their vision as well
as their commitment to all our stakeholders. Deliveroo is
a fascinating and complex business and, as Will explains
in his letter, it’s a tough balancing act to manage a three-
sided marketplace for the benefit of our consumers,
riders and restaurant and grocery partners. We are a
global online technology company but we work on a
neighbourhood by neighbourhood basis. We are growing
quickly in a competitive and fast-changing sector which
requires constant innovation to flourish. Most importantly,
CHAIR’S LETTER
Claudia Arney
Chair
PROGRESS
MAKING GOOD
our business connects us to people in a very personal way
as food is about more than just sustenance. It provides us
with pleasure, special times with family and friends, and the
celebration of different cultures. At Deliveroo we feel a real
connection to the communities in which we operate and we
are focused on how we can support them in ways that are
important to them. As a Board we have spent time since IPO
thinking about these matters and I will explain more about
that below, but would first like to focus on how the business
performed during FY2021.
Our performance during FY2021
One big milestone this year was becoming a publicly
listed company on 7 April 2021, which was a significant
undertaking. I would like to thank our internal teams
and advisers for their hard work in making this happen
particularly, while having to navigate the business through
the unprecedented challenges brought on by COVID-19.
From an operational and strategic perspective, the business
performed well in 2021, delivering an excellent year of
growth, making further UK market share gains, strengthening
our leading position in on-demand grocery and continuing
to scale our differentiated offerings, Plus and Editions.
This has translated into strong financial performance with
full year gross transaction value (GTV*) up 70% year-on-
year in constant currency*. Adjusted EBITDA* was a loss of
£(131) million compared to £(11) million in 2020, reflecting
the reversal of benefits from higher basket sizes during
COVID-related lockdowns, as well as increased investments
in marketing and technology to support future growth. Net
proceeds from the IPO bolstered our financial resources
as we ended the year with no borrowings and £1.3 billion in
cash and cash equivalents.
Governance and Board focus
When we embarked on the IPO process, we believed that
it was important to ensure that Will could continue to
execute on his vision for how Deliveroo should evolve and
grow, while also allowing others to share in that growth
* To supplement performance assessment, Deliveroo uses Alternative Performance Measures (‘APMs’), which are not defined under IFRS. APMs are indicated in this
document with an asterisk (*); definitions and further details are provided on page 191.
Strategic report Governance report Financial report
08 deliveroo plc Annual Report 2021
Strategic report Governance report Financial report
and to have confidence in the governance of the Company.
As a consequence we adopted a time-limited dual class
structure for three years to provide the stability and
flexibility to allow Will and his team to focus on and execute
on their vision and strategy. At the time of the IPO we also
committed to strong governance. In particular, that we
would voluntarily comply with certain aspects of the UK
Corporate Governance Code (the Code) that the Board
considers appropriate in light of the nature of our business.
We confirmed that we would actively recruit additional
independent Non-Executive Directors to ensure that the
composition of the Board and its Committees was fully
compliant with the Code. We have achieved this, with the
appointment of additional independent Non-Executive
Directors Karen Jones CBE and Dominique Reiniche during
the year, and Peter Jackson joined the Board in 2022.
All three are making a very valuable contribution to the
development of our business and I would like to thank them
as well as our other Non-Executive Directors Rick Medlock,
Lord Simon Wolfson and Tom Stafford for their hard work,
insights and advice.
I am pleased with how the Board has been working to
establish the routines and oversight necessary for a PLC
Board and to assist the Company in its transition to public
company life. The Non-Executive Directors have brought
their varied experience and relevant skill sets to the fore to
constructively challenge the business and to support the
management team as they seek to grow and strengthen
the Company. I discuss in detail in our Governance Report
(page 70) the work of our Board during the year. We have
particularly focused on the consideration of our strategy
and growth plans and how to ensure we have the right
people to execute on our plans, especially in the areas
of engineering, product and data science. We know that
having a strong team in these areas will yield a competitive
advantage in both our day-to-day operations as well as our
longer term investments.
Our Remuneration Committee has worked hard to develop
a Remuneration Policy which will support the recruitment,
motivation and retention of the talent that we need to
deliver on our strategy, and our shareholders will be
considering our Remuneration Policy at our upcoming AGM.
This has been the subject of recent engagement between
Karen Jones, our Remuneration Committee Chair, and our
significant shareholders. We have sought to ensure that our
remuneration framework is flexible and competitive with
the pay models offered by many of our competitors, whilst
still ensuring that our overall incentive levels are capped
and consistent with UK PLC pay models. More detail on this is
provided in the Directors’ Remuneration Report on page 93.
Supporting our communities and sustainability
I know we all hope that we have begun to move beyond
the COVID pandemic which brought such unprecedented
challenges for us all. I would like to thank our leadership
teams across Deliveroo for their efforts during these
difficult times to maintain our culture and operations,
and to support our employees and wider marketplace to
ensure we could operate safely. This included ensuring that
our consumers could receive their orders with no direct
contact, extending our range to offer more grocery which
was vital to so many people who were unable to go out
during this time, and offering riders support if they had to
isolate and couldn’t work. I am particularly proud of our
delivery of free meals during the crisis to those in need in
the UK and to NHS workers, and our similar efforts in some of
our other communities. We hope that these difficult times
are truly behind us and we are pleased to see many of our
innovations continuing to resonate with our consumers,
riders and grocery and restaurant partners.
We know we need to make our platform deliver real value
for all participants in our three-sided marketplace for us
to be successful in our mission to be the definitive online
food company. We also know how much environmental,
social and governance issues (ESG) matter to each of the
communities of our marketplace, as well as our employees
and other stakeholders. These issues are also very important
to Will and the entire Board, and we are very conscious of
the leadership role that we must play. We are committed
to taking action to drive sustainability in our operations
particularly in reducing plastic and food waste and carbon
emissions, and to supporting positive change in our
sector. We are at the beginning of our journey to build a
comprehensive sustainability strategy and we have set out
in our Sustainability Review on page 35, the key pillars we will
focus on as well as some initial actions. As we continue to
evolve our ESG strategy during the coming year, we plan to
establish clear commitments in these areas which we will
share with you on an ongoing basis.
Looking ahead
The coming year will be focused on continuing to execute on
our strategy and investing to drive forward our key growth
initiatives as well as moving towards breakeven and long
term profitability. I am confident we have the opportunity,
and the talented and committed teams that we need across
the business who can make this happen.
It was a significant milestone listing on the London Stock
Exchange and we are very pleased to welcome our new
investors. We are also really appreciative of the efforts of all
our teams across the world and to our partners, riders and
others who work with us, for their hard work and support
during the year. Thank you for your belief in Deliveroo and for
coming on our journey with us.
Yours sincerely,
Claudia Arney
Chair
24 March 2022
Strategic report Governance report Financial report
09Annual Report 2021 deliveroo plc
* To supplement performance assessment,
Deliveroo uses Alternative Performance
Measures (APMs), which are not defined
under IFRS. APMs are indicated in this
document with an asterisk (*); definitions
and further details are provided on page 191.
Strategic report Governance report Financial report
10 deliveroo plc Annual Report 2021
OPERATIONAL HIGHLIGHTS 2021
DELIVER
CONTINUING TO
1. Grew our monthly active consumer base to 8 million
We ended the year with an average of 8.0 million monthly active
consumers (MACs) in Q4 2021 across our 11 markets. This is more
than double the number at the start of 2020 (Q1 2020: 3.6 million),
reflecting both strong acquisition and retention. This increase in
MACs was the primary driver of GTV* growth in 2021.
8.0M MACs
2. Expanded our restaurant selection
We further increased our restaurant selection to over
148,000 partner sites live on the platform globally (Q4 2020: 102,000).
We also added over 100 delivery-only Editions kitchens, taking the
overall number to more than 300 globally.
148,000+
RESTAURANT PARTNER SITES
3. Strengthened our on-demand
grocery offering
Our existing and fast-growing
on-demand grocery service now
delivers from over 11,000 partner
grocery sites globally (Q4 2020: ~7,000).
To complement this, in September
2021, we launched Deliveroo Hop, a
new rapid grocery delivery service,
operating from delivery-only stores.
8%
OF TOTAL GTV* IN GROCERY
IN 2021