Deliveroo is handing £10m of stock options to permanent staff in a move to promote loyalty from employees amid tough competition for talented developers and engineers in the UK.
The food delivery start-up, which is one of Europe’s most valuable and fastest growing technology companies, told its 2,000 staff in a memo that they would receive the windfall in coming months.
The group’s army of bicycle-riding food couriers — who are classified as self-employed contractors instead of employees — will not be eligible for the awards.
However, permanent staff will receive the share options, which they will be able to cash in if Deliveroo launches an initial public offering or is sold. The start-up has been reported to be looking at an IPO in the next two years.
The decision to award share options was taken without concrete plans for a listing, according to a person with knowledge of Deliveroo’s thinking. The UK has some of the highest levels of employee ownership in the tech sector because of a rule change in 2000 that made stock awards more tax efficient.
The decision to award stock options often precedes a listing as companies expect the value of their shares to climb ahead of going public.
William Shu, chief executive, said on Wednesday that he wanted employees to “be owners in Deliveroo and to have a real stake in the company’s future as we expand and grow”, but did not comment on plans for an IPO.
Earlier this year Deliveroo announced that it would hire 250 more employees in London to bolster its expansion plans amid tough competition from rivals such as UberEats and Just Eat. The company said the new staff would include data scientists, software engineers, product designers and cyber security specialists.
However, it will face competition to lure such workers from Silicon Valley technology companies including Facebook and Amazon, which are also hiring in the UK. The country’s decision to quit the EU has created pressure on the workforce of skilled tech developers, many of whom come to London from the continent.
Deliveroo was valued at more than $2bn last year when it sold a $385m stake to a group of investors including US fund managers Fidelity and T Rowe Price. Following its last fundraising round, the company has raised a total of $957m.
News of the Deliveroo share options was first reported by Sky News.