Deliveroo has appointed Goldman Sachs and JPMorgan to manage an initial public offering (IPO) of between 35-40% of the business in the first half of 2021, the sources said. London and New York are the main options for the deal.
The London-based firm could be valued at more than 3 billion pounds, the sources added, after a boost from the COVID-19 pandemic when many restaurants turned to Deliveroo for home delivery services.
Deliveroo and JPMorgan declined to comment. The LSE and Goldman did not immediately respond to requests for comment.
Historically, European tech companies such as Spotify have chosen a New York listing to access the world's biggest tech investor community and an entrepreneur-friendly listing regime.
"We are all doing what we can to convince Deliveroo to stay in London, and increasingly tech firms are seeing the benefit of listing on their home venue and getting the investor attention they deserve," one of the sources said.
"It helps that the kind of valuation commanded by the likes of The Hut Group is comparable to the U.S."
With a number of British tech firms such as Darktrace, Trustpilot, Moonpig and Music Magpie exploring possible listings next year, Deliveroo would be a major coup for the LSE, following The Hut Group's multi-billion pound listing in September.
Business lobbies such as the City of London Corporation have been pushing regulators to allow dual-class share listings to make the market more attractive to tech companies, while British finance minister Rishi Sunak has said he is planning to review the country's listings regime to draw the most innovative firms.
Deliveroo has raised over $1.5 billion in private funding in the last three years, with tech giant Amazon taking a 16% stake when it led a $575 million funding round for the company in May 2019.
T.Rowe Price, Fidelity and Greenoaks are also shareholders.
(Reporting by Abhinav Ramnarayan; edited by Pamela Barbaglia and Kirsten Donovan)
By Abhinav Ramnarayan