Deliveroo's loss was wider in 2021 compared to 2020. The adjusted core loss last year was 131 million pounds while a year before the figure was just 11 million pounds. It is believed the increase in technology investment and marketing spending led to such a widened loss.
Meanwhile, the takeaway delivery specialist is focusing to reach the breakeven level in core earnings and the time period set is about two years. It is predicting the rise in gross transactions may be between 15 percent and 25 percent in 2022. It is a slowdown from last year's 70 percent when the sales were boosted by the COVID-19 pandemic lockdowns and people were forced to stay indoors.
The London headquartered company lately assured investors to be focusing on reaching a breakeven level in the period of two years from now with respect to core earnings.
Deliveroo was founded in 2013 by Will Shu and in the period of nearly one decade, it has never witnessed a profit. Lately, it experienced a disastrous market float. However, the revenues in 2021 rose by 57 percent and stood at 1.8 billion pounds. The cash flow mainly comes from fees paid by customers and restaurants.
The company said the orders have increased by about 72 percent as the UK businesses are gaining strength.
Talking about significant losses in 2021, it stated the primary reason was investing heavily in tech improvements and marketing to keep momentum following the COVID-19 pandemic restrictions.
It reported a jump of 67 percent in transaction value last year and it was due to an increase in the number of orders by 73 percent.
Apart from all these, Deliveroo has added sites of more 19,000 restaurants on its UK platform and simultaneously boosted the grocery operation.
The company further stated that the current inflation and economic impacts of the Russian invasion of Ukraine may turn up challenging, but they are making good progress in successfully implementing their strategy.
Shu said their UK and Ireland performance was encouraging and they will continue to grow the market share as well as achieve profitability.
Meanwhile, experts believe the profitability reality seems to be a long way off for the company as growth comes at a significant cost even though the market share and transaction values look impressive.
It is simultaneously feared whether the marketing may encourage bringing back the loyal customers and this should be the primary concern for Deliveroo. Marketing spending may remain high in 2022 due to increased competition.
Deliveroo currently is equipped with 160,000 grocery and restaurant partner sites. It has more than 180,000 riders.