A tasty tech takeaway for London?

 
Pizza slices

The champagne corks must be popping at the London Stock Exchange - and maybe at the headquarters of Tech City, they'll be ordering a takeaway chicken korma to celebrate.

Having wooed all sorts of technology companies in the hope of having a high profile stock market flotation - and seen most swept off their feet by those flashy US exchanges - London has at last bagged one.

The online takeaway food service Just Eat has confirmed this morning that it will list its shares on the London Stock Exchange (LSE). We knew for a couple of months that this was coming, but the confirmation will be something for boosters of London's tech cluster to trumpet.

Just Eat is part of what you might call the Scandi-UK trend - firms which started in Scandinavia but have a big presence in London. Sweden's Spotify is one, the Candy Crush Saga games firm King.Com is another. But King's initial public offering (IPO) is set for the New York Stock Exchange and it is hard to see Spotify deciding to float anywhere but in the US, its biggest most important market.

Start Quote

At a time when shares in technology businesses are scaling new heights, it would not be surprising to see Just Eat become a billion pound business”

End Quote

So London will have to settle for Just Eat, a firm which started offering a platform for takeaway food merchants in Denmark but whose biggest market is now the UK. Last year two thirds of its revenue - around £69m - came from UK takeaway orders, and its margin of 37% appears to show that hungry British customers are the basis for a very profitable business. In total it serves 13 markets, including Ireland, Canada and Spain.

We won't know how the company will be priced until it actually comes to the market, but there is talk of a valuation as high as £900m. At a time when shares in technology businesses are scaling new heights, it would not be surprising to see Just Eat become a billion pound business. Just by comparison, the discount retailer Poundland floated at a valuation of £725m last week, and had revenues roughly 10 times those of Just Eat last year - although its margins were of course much slimmer.

Good news for London then - but there are a few questions to be answered. Can a business so heavily dependent on UK consumers really grow that rapidly? Isn't this a market which will be rapidly invaded by other entrants, putting the squeeze on Just Eat's healthy margins? And is a firm which is really about delivering hot food by moped really a technology business?

Just Eat website

When I put these questions by phone to Just Eat's chief executive, David Buttress, he has a robust response. "We're very much an international business," he tells me, when I ask whether overseas consumers would be quite so keen on a takeaway curry or pizza. "We've got 16,000 restaurants outside the UK."

He says the online takeaway business is still in its very early stages - "the main competition is the telephone" - and that means there is plenty of room for growth. As for the threat of competition and my question about technology, the two are linked. "This is a completely technology-enabled company. We take 900 orders every minute, every restaurant has a Just Connect terminal and that has taken many years to build." In other words, the barriers to entry are already very high.

He points out that Just Eat has also been quick to develop mobile apps, and in a world where the mobile internet is becoming the standard platform for online commerce, that experience will be hard for anyone else to replicate.

Mr Buttress also praises London's support for hi-tech businesses but says the decision to float here is all about "what is right for Just Eat."

Last week the London Mayor Boris Johnson re-designated Tech City as covering the whole of the capital which he described as Europe's biggest hi-tech cluster. That will have caused raised eyebrows in various places, not least in Cambridge, the birthplace of some of the UK's hi-tech superstars like chip designer ARM and bluetooth specialist CSR.

Now London may have its own billion pound business to brag about, albeit one which was founded long before the government began to market Tech City. So there is a lot riding on the Just Eat flotation. All eyes will be on the LSE to see if investors swallow it up and order another one - or send it back as lacking sufficient nutrition.

 
Rory Cellan-Jones, Technology correspondent Article written by Rory Cellan-Jones Rory Cellan-Jones Technology correspondent

More on This Story

More from Rory

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    -1

    Comment number 44.

    @23
    I think you've had bad luck. Whenever I use JustEat, it's for the same particular takeaway place (we have none within walking distance). Because the order is submitted online, there's less chance of a mix up, and the prices are the same as anywhere else serving a similar menu. And if I order during the week, the food is with me within 30 minutes. Simples!

  • rate this
    +1

    Comment number 43.

    38.Muppet Master
    1: The cost to you, the customer does not change if ordered directly or through the site
    2: You can order in advance and pick your delivery time, again no change here
    3:There are no reviews of flyers through the door
    4:Helps you easily find takeaways if it's an area you're not familiar with.

  • rate this
    +1

    Comment number 42.

    http://www.just-eat.co.uk/blog/just-eat-statement/

    @28 Mark

    Decided to research that news story and guess who's name came up?
    Just Eat.

  • rate this
    -1

    Comment number 41.

    I love this site and use it all the time. Why?
    a) Because it's simple
    b) because it brings together a wider variety of options than I'd normally consider, and
    c) mostly because - faced with competing leaflets pinned on my noticeboard & no way of telling the differnece - there are customer reviews and ratings to inform quality in a market notorious for below par options.

    Good luck to them.

  • rate this
    +1

    Comment number 40.

    And when this company goes bust, I hope we taxpayers don't have to bail them out.

    After all, that is what happens in the City.....

  • rate this
    +7

    Comment number 39.

    What UK really needs is businesses who add absolutely nothing to anything & just cream profits, maybe just eat is in contention for converting to a UK bank.

  • rate this
    +6

    Comment number 38.

    So my £11.75 [incl. delivery] madrass, naan bread, saag aloo side dish, poppadoms and pickles can be had for more money as much if I order it through this site, and probably take longer to arrive

    Appart from paying their shareholders to do nothing, what use is it again?

  • rate this
    +16

    Comment number 37.

    I find it rather sad that a system for ordering take away food can be so highly valued.

  • rate this
    +1

    Comment number 36.

    Love the people who think it's easier to telephone their order.
    1) If engaged you have to play redial roulette
    2) When you do get through, good luck understanding or being understood.
    3) When they get the order wrong, what audit trail is there that you ordered what you did ?

  • rate this
    +6

    Comment number 35.

    Meal2Go were a much better site. Better website, and easier to use. JustEat bought them, and managed to lose order histories and (thus far) any loyalty points built up. Steer well clear.

  • rate this
    +11

    Comment number 34.

    Nice advert BBC, I imagine you have more than a vested interest in this as it certainly isn't newsworthy...

  • rate this
    +5

    Comment number 33.

    Some of the takeaways listed on Just Eat in Doncaster I would not recommend to use.

    The takeaways in Doncaster I use, are chosen because of previous experience & especially because they maintain the highest council health/hygene standards certification.

    Incidently BBC, Just Eat is not a hi tech company, it is purely a sales marketing company that adds extra costs onto customers who use it

  • rate this
    +1

    Comment number 32.

    So many things to talk
    about.......and this is the option chosen by our beloved media moguls.
    When we vote on next election, will Vilhelm deny their loss?
    Where is the missing plane? And what have they done with the people?
    What will the plane be used for?
    Oh yes, dial a pizza more important...shocking. More fat lazy cats is just what we need.

  • rate this
    +6

    Comment number 31.

    Planning regs & hygiene rules are not checked effectively in London, as there are too many small producers and too few local authority staff. I've been poisoned by dodgy food many times in London. I am very careful now-a-days.

  • Comment number 30.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +10

    Comment number 29.

    Don't really see the point of this company, yet another middleman which will no doubt be unaccountable both to the taxman and when things go wrong, for example with cases of food poisoning.
    Still plenty of publicity and a fanfare by the financial sorts talking it all up.
    Plenty of technobabble and BS as usual which the stupid public seem to lap up nowdays.

  • rate this
    +2

    Comment number 28.

    Just remembered a news story a while ago.

    A company doing exactly what Just Eat is doing.
    They were taking the orders and sending them to dodgy outlets with no hygiene checks or license to prepare food.

    So how will you know the food will be coming from the takeaway, who's menu you ordered it from?

    Go direct, cut out the middle man and his cut.
    Then you will know where your food is coming from.

  • rate this
    +5

    Comment number 27.

    @3 Natalie Rowe

    Not very much from what I hear, but they are good at blowing up balloons

  • rate this
    +10

    Comment number 26.

    Another multi national that won't pay any tax.

  • rate this
    -9

    Comment number 25.

    ILLEGAL SANCTIONS

    How can the EU impose "Sanctions" without the UN ?

    This is illegal according to international law.

    It is just violence.

    The West are bad losers. They sent in the CIA / MI5 to destabilise Ukraine ... and then Crimea became Russian.

    America is the big winner.

    By dividing the EU and Russia ... the US prevents a natural and powerful alliance across Eurasia.

 

Page 4 of 6

 

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.