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Tech: Softbank’s £71 Billion Tech Fund Is Reportedly Going To Invest In Deliveroo

The investment would apparently make Deliveroo a unicorn.

A cyclist rides a bicycle as he delivers food for Deliveroo, an example of the emergence of what is known as the 'gig economy', in Paris, France, April 7, 2017. Picture taken April 7, 2017.

A cyclist rides a bicycle as he delivers food for Deliveroo, an example of the emergence of what is known as the ‘gig economy’, in Paris, France, April 7, 2017. Picture taken April 7, 2017.

Deliveroo might be worth as much as $1.5 billion (£1.1 billion) if the world’s biggest tech fund decides to take a stake.

According to a Sky News report, the $93 billion (£72 billion) Softbank Vision Fund is reportedly in talks to invest in the food delivery startup.

One source told Sky that a successful deal could make Deliveroo London’s latest tech “unicorn”, the nickname given to startups with a valuation of more than £1 billion.

According to Sky, Softbank is interested in taking a stake but it might be weeks before the deal is finalised. Sources told the broadcaster that Deliveroo would probably raise a similar amount to its last round in August, when it raised $275 million (£210 million) from private equity firm Bridgepoint, DST Global, General Catalyst, and Greenoaks Capital.

Deliveroo was founded in 2013, and competes with services like UberEats and Just Eat to deliver food to people’s homes from local restaurants. Its main differentiator is that it delivers food from restaurants which don’t normally offer a takeaway service, using couriers who deliver by bicycle or motorbike.

The company has become a poster child for the gig economy. Deliveroo says its couriers are self-employed, meaning they don’t get benefits on offer to full- or part-time employees. Some of its couriers are considering legal action over their employment status, and the company had to update its employment contracts after MPs criticised a clause that prevented riders from taking the startup to tribunal.

Softbank’s Vision Fund is the biggest tech fund in history, and closed in May this year with partners including Apple and Qualcomm. Its parent firm Softbank has already made a number of major deals with tech firms, including a $500 million (£384 million) stake in UK simulation startup Improbable, and the £24 billion acquisition of chipmaker ARM. The Vision Fund reportedly invested $300 million (£231 million) in WeWork in March, according to Bloomberg.

Deliveroo told Sky it doesn’t comment on rumours, while Softbank hasn’t responded to a request for comment.

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