Deliveroo’s shares tumbled 30 per cent in the company’s London debut on Wednesday, in a blow to ambitions to lure more British tech companies to list in the UK.

The shares plummeted as low as 271p within the first 20 minutes of trading, according to Refinitiv data. At 8.45am, the share price had recovered to 313p.

The company had set its opening share price at the bottom of its target range at 390p on Tuesday, citing choppy market conditions and following a backlash from some large British investors over corporate governance.

The initial public offering had given Deliveroo an opening valuation of around £7.6bn, the highest in London since resources group Glencore’s 2011 IPO, according to Dealogic data.

But the food delivery app quickly shed more than £2bn in market value in its first moments as a public company, in one of the sharpest drops for a major new listing in years.

As recently as Tuesday, Deliveroo had insisted that it had seen “very significant demand” from investors and the deal had been covered “multiple times”, even as it moved to lower its pricing range earlier this week.

Deliveroo sold shares worth £1.5bn in the offering, raising gross proceeds of around £1bn for the company to invest in new growth initiatives such as its Editions network of delivery kitchens, while existing investors will cash in to the tune of £500m.

Yet retail investors, who had been allocated £50m worth of stock in the IPO that was marketed within the Deliveroo app, will be unable to trade until next Wednesday, when unconditional dealings begin.

At a time when other European companies have looked to go public in New York or Amsterdam, Deliveroo’s IPO has been seen as a test case for a Silicon Valley-style tech company listing in London. While online retailer The Hut Group has shown strong gains since September’s IPO raised £1.9bn, internet ratings service Trustpilot has struggled to gain momentum after its debut last week.

Deliveroo, founded in 2013, lost £224m last year but saw revenues jump 54 per cent, as takeaway orders were accelerated by pandemic lockdowns across Europe.

“I am very proud that Deliveroo is going public in London — our home,” said chief executive Will Shu. “Our aim is to build the definitive online food company and we’re very excited about the future ahead.”

Shu holds outsized voting power in the stock thanks to a dual-class share structure, which is common among Silicon Valley companies such as Google and Facebook but rare among UK listings. The arrangement will prevent Deliveroo from entering the FTSE 100 for now, but Rishi Sunak, the UK chancellor, has proposed reforms that would allow companies with dual-class shares to gain access to the premium segment.

Investors at several large UK asset managers, including the fund management arms of Legal & General, Aviva and Aberdeen Standard, decided not to participate in the IPO, citing a combination of regulatory risk and corporate governance concerns, particularly the dual-class structure.

Amazon, Deliveroo’s largest investor, sold shares worth around £91m in the IPO, while Shu also cashed in around £26m.

Early investors Index Ventures, DST Global, Accel, Greenoaks, Bridgepoint and General Catalyst sold around 10 per cent of their stakes in the IPO. Two of Deliveroo’s larger private backers, T Rowe Price and Fidelity, have chosen not to sell yet.

Deliveroo’s pre-IPO investors are now prevented from selling further shares for up to 180 days, under lock-up rules.

Goldman Sachs and JPMorgan are Deliveroo’s joint global coordinators, while Bank of America, Citigroup, Jefferies and Numis acted as bookrunners.

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