Deliveroo, the Amazon-backed food delivery service, has picked London as the venue for its blockbuster IPO

• Deliveroo, the online food delivery company backed by Amazon, confirmed plans to list in London.
• The news comes a day after a government-backed review recommended changes to London's listing rules.
• The proposed changes aim to help the UK capital remain more competitive after Brexit.

Deliveroo, the online food delivery company backed by Amazon, confirmed plans to list in London for a multibillion-dollar float.

While Insider previously reported that an IPO could value it above $13 billion (£9.2 billion), The FT reported on Thursday that Deliveroo is targeting a price tag of up to $10 billion, according to people briefed on discussions at the delivery company.

The news comes a day after the government-backed Lord Hill review recommended significant changes to London's listing rules to help the city remain more competitive after Brexit, and attract more high-profile tech floats.

As it stands, companies looking to list on the more prestigious "premium" segment of the London Stock Exchange cannot go public with a dual-class share structure.

This kind of structure gives founders more voting rights and greater control after the company goes public, and is used by US-listed firms such as Facebook. Founder-CEOs say it allows them to take a longer view of strategy and retain more control of their businesses when making crucial decisions.

The Lord Hill review recommends changing the rules to enable this dual-class structure in this particular segment of the London Stock Exchange. For now, Deliveroo is eyeing a listing on the LSE's "standard" segment, which is less prestigious but does allow the dual-class share structure, doubtless banking on a formal change in the rules.

The expected overhaul has not yet been officially confirmed, however, and will need to be approved by the regulator, the Financial Conduct Authority.

Deliveroo was founded in 2013 by Will Shu, a former banking analyst, who hated the lack of options available when he had to eat at his desk. Amazon backed the firm in 2019, and a subsequent round in 2020 valued the firm at $7 billion.

Shu said in a statement on Thursday: "Deliveroo was born in London. This is where I founded the company and delivered our first order. London is a great place to live, work, do business and eat. That's why I'm so proud and excited about a potential listing here."

The CEO's decision underlines the company's role in supporting its 47,000 employees based in the UK. When the pandemic hit in March, Deliveroo warned that the company might subside, as restaurants were forced to shut down. This led to more than 350 workers losing their jobs.

When lockdowns encouraged consumers to navigate towards food delivery apps, however, Deliveroo experienced significant growth in which it said it became "operationally profitable" in 2020.

Not everyone welcomes the pending influx of highly valued tech firms onto the public market, however.

Professor John Colley, associate dean of Warwick Business School and an expert on tech firm IPOs, said: "This valuation of Deliveroo seems excessive for a business which is still many years from profit, especially given that some hold significant doubt whether the home takeaway delivery model can become profitable outside of London."

He added: "Indeed, the sole basis for this valuation appears to be the immense amounts of cash looking for growth technology stocks. Bear in mind the recent Supreme Court finding that Uber drivers are 'workers' and have certain rights such as paid holidays and pensions. This finding may well apply to takeaway home delivery too, driving up their costs."