Will Shu: Deliveroo’s shaken but undeterred founder

Will Shu knocked on the front door, sweaty from his cross-London bike ride but ready to hand the food order to another hungry customer. Back in 2013, Deliveroo was just a fledgling start-up and Shu, its co-founder, was “doing every job in the company”.

When the door opened, Shu recognised the customer as a colleague from when he worked at a hedge fund. “Will, are you OK?” he was asked. “He just thought I went nuts,” Shu later recalled.

Shu was still delivering occasional orders until a few weeks ago, when preparations began for Deliveroo’s initial public offering. Although the food delivery company is now valued at more than £5bn, making him a multimillionaire, the US-born entrepreneur insists most customers don’t know “who I am”. In the City, however, Deliveroo will long be remembered for this week’s debacle of London’s biggest-ever tech IPO.

Engulfed in rows over corporate governance, tech valuations and gig workers’ rights, shares in the company closed down 26 per cent on their first day. That was the worst performance for a large UK listing in decades and shook London’s ambitions to lure more tech deals.

Although Shu based the company on an Uber-style model and, with his bankers, had pushed for an up to £8.8bn valuation, he never expected to be in this situation. “I never set out to be a founder or a CEO,” he wrote to potential investors in last month’s prospectus. “I was never into start-ups, I didn’t read TechCrunch.”

Born in 1979, takeaways were a rare treat when Shu and his sister were growing up in New Haven, Connecticut, the children of Taiwanese immigrants. His scientist mother and father, who worked in insurance, passed on thrifty habits and Shu is yet to trade up from his Notting Hill flat, despite cashing out about £26m of shares in the IPO while retaining a 6 per cent stake.

After graduating from Northwestern University and then working on Wall Street, Shu conceived Deliveroo in the early 2000s after moving to London. He was working as an analyst at Morgan Stanley and could not understand London’s lack of late-night takeaway options, which he had enjoyed while at Salomon Brothers in New York. Deliveroo was almost called Boozefood, for ordering “when we were drunk”.

After launching in 2013 in London’s upscale Chelsea neighbourhood, Shu financed the business himself for its first year. Hustles then included dressing up as a kangaroo to hand out flyers, while regular delivery shifts provided feedback from other couriers, restaurants and customers.

“The work ethic of this guy is unreal,” says Martin Mignot, a partner at Index Ventures who invested in Deliveroo’s first round of external funding in early 2014 when it was valued at just £10m.

Early restaurants on the app included mid-market chains such as Yo! Sushi and Ping Pong, a cut above the pizzas typically found on existing delivery websites. Yet, although a foodie, Shu’s favourites also include Kentucky Fried Chicken, and he would sometimes show up at early venture capital meetings wearing shorts and joking about his ability to eat “60 Chicken McNuggets in one sitting”.

Caroline Hazlehurst, one of Deliveroo’s first 50 employees, describes him as “really humble and down to earth . . . quite rare in other founders that I’d met”. But he still knew every detail of a business that is more complex than it might appear. “If he met you next to the water cooler, he’d know all your [key performance indicators] for that week,” said Hazlehurst, who left in 2018.

Shu brought Silicon Valley-style ambition to London, just as the capital’s tech community was outgrowing its wannabe “Silicon Roundabout” roots. His pitch to become the “definitive online food company” enticed early venture capitalists. But it has not yet won over public market investors, who were concerned that Deliveroo lost £224m in 2020, despite seemingly ideal food-delivery conditions during Covid lockdowns.

Many old-school City investors also bristled at Shu’s insistence on dual-class shares, which hand him control of the board and shield him from activist investors or hostile takeovers until they expire in three years. On top of that, there are regulatory concerns that Deliveroo’s 100,000 couriers may eventually be reclassified as workers or employees, at a cost that could break its business model.

Fred Destin, a London-based seed investor, insists that Shu “always cared about the riders” and wrestled with the issue from the earliest board meetings. “Will is not some kind of megalomaniac, Silicon Valley, ‘I wanna make money at all costs’ kind of a guy,” he says.

Deliveroo has called for a “third way” in employment law that would give its contract workers more protections and benefits. Yet, while many Deliveroo riders value the flexibility of gig work, not all admire the boss.

“Generally there’s a pretty negative view of him for any rider that’s been doing this a while because we’ve seen the conditions and pay decline,” said Joseph Durbidge, who has delivered for Deliveroo in London for over two years. Deliveroo says the average fee per delivery has risen year on year.

Setbacks are not new to Shu, who has always bounced back before, says Mignot, adding that Deliveroo’s many “doubters” over the years have “become fuel to him”. Shu now has three years before his dual-class controls expire to prove the doubters wrong.

tim.bradshaw@ft.com