Just Eat Plc, the start-up founded in 2001 by five Danes which has recently shot to fame, filling a hole in the takeaway market by providing an easy to use app that allows you to access the menus of 100’s of local takeaway’s and place your order, experienced a more than satisfying debut on the London Stock Exchange yesterday, giving London’s FinTech industry a much needed shot in the arm at the same time.
Just Eat first arrived on British shores in 2006, although the app was not released until Feb 2013. Daniel Read, Chief Product Officer, announced the apps millionth download in September last year, commenting ““our apps are all about empowering consumers to order the way they want. It’s proof our mobile first strategy is working”. The app was produced in house by the Just Eat team.
David Buttress, acting president, explains “we’re enabling our takeaway restaurant partners to compete on a level playing field with the big national players, and capitalise on the explosive growth in mobile”.
According to the Company’s research, mobile ordering will be the most popular kind of ordering by 2015, and Buttress, whose business card describes him as “Chief Executive Officer and anti-cooking activist”, has declared “We are the WhatsApp of takeaway”.
Shares rose by as much as 10% on their first day of trading yesterday, meaning the Company is now valued at more than £1.5 billion pounds, not bad for a Company that 10 years ago had only 4 staff, and a database of just 500 restaurants.
Last year the Company processed over 40 million orders on behalf of 36,000 takeaway outlets in over 13 markets, including Spain, Brazil, France and Canada.
However, the UK is proving to be the greatest success story, with the largest number of restaurants registered and most orders, a success which can be at least partly attributed to the appointment of Ash Ali as the Company’s first Marketing Director between 2008-2010, and a highly successful advertising campaign featuring exasperated chefs beseeching the public “Don’t Cook, Just Eat”; the catchy strapline certainly set stomachs rumbling.
Shares were priced at 260 pence and the Company sold approximately 25% of its equity, retaining an option to sell a further 1.4%.
In 2013 Just Eat recorded revenues of £97 million pounds, with profits of £14 million, an impressive 518% gain from the previous year.
The listing will be seen as a vindication of the LSE’s “High Growth Segment” initiative, introduced last year, and specifically tailored to meet the demands of fast growing tech companies.
Just Eat will receive £100 million pounds of gross proceeds, while the rest of the money belongs to its Venture Capital backers such as Index Ventures, Vitruvian Partners, Redpoint Ventures and Greylock Partners. Management and Employees may also cash in by selling down their personal shareholdings.
The Just Eat listing will be seen as a significant boon for London’s Tech cluster, which has so far failed to deliver a Company as game changing as a Facebook, or Google, but is building an impressive portfolio of smaller enterprises with significant growth potential. Boohoo.com Plc, the fashion retailer saw its shares rise 40% on its first day of trading back in March, and AO World, the domestic appliance retailer has been another notable success.
Although criticism has been directed at the lack of sophisticated technological resource at the heart of these companies, which are not in essence technology products, one fact is undeniable; Just Eat, along with its slogan, “Give hunger the finger”, represents the largest technology float on London’s market for 8 years. One in the eye, perhaps, for rival FinTech centres such as New York, whose reputation was dealt a blow with the recent IPO flop of King Digital Entertainment, the makers of Candy Crush Saga.
If the global tech bubble is threatening to burst, perhaps London, which has focused on organic, structured, growth, rather than de-regulating its listing rules to attract companies of dubious value, might soon, in true punk style, be giving New York, and other financial centres, the finger.
London Deputy Mayor for Business and Enterprise Kit Malthouse certainly agrees, reflecting on the listings success, “This shows not only that exciting tech firms like JUST EAT can find a route to stock markets through London, but also that this city’s thriving tech sector continues to nurture new success stories.”