As appetite sours for stocks that flourished during the lockdown, institutional investors have rebuffed the bellwether for the gig economy in droves. Asset managers including Legal & General Investment Management said they wouldn’t buy the stock because Deliveroo’s treatment of couriers doesn’t align with responsible investing practices.

Investors have also balked at the dual-class structure that allows Chief Executive Officer Will Shu to retain control of the business for three years. Hundreds of riders are planning a protest next week to lobby for better pay and conditions.

The shares were priced at 390 pence, the bottom end of the initial range. Among the five biggest deals in London this year, Deliveroo is the only company that didn’t receive the highest targeted valuation, data compiled by Bloomberg News show. Goldman Sachs Group Inc. and JPMorgan Chase & Co., the lead banks on the offering, declined to comment.

“It’s not a great endorsement of setting IPOs in the U.K.,” said Neil Campling, analyst at Mirabaud Securities. “You have the combination of poor timing, as many ‘at home’ stocks have been under pressure in recent weeks, and the well-publicized deal ‘strike’ by a number of A-list institutional investors.”

Investors are also souring on the fast-growing companies that benefited during the pandemic. Doordash Inc. has slumped 24% this month, and European rivals Just Eat Takeaway.com NV and Delivery Hero SE have also fallen this year.

“The window for tech-driven IPOs just couldn’t be worse,” said Oliver Scharping, a portfolio manager Bantleon AG. “Deliveroo was trying to keep the window open with brute force.”

The company and its banks also sought a premium valuation for the stock. At the offering price, Deliveroo fetched 6.4 times last year’s revenue, versus a multiple of 5.8 for Just Eat. At the middle of the original price range, the stock would have been valued at 19 times gross profit versus less than 7 times for its Dutch rival, said Alberto Tocchio, a portfolio manager at Kairos Partners.

Among the losers in the IPO will be retail investors, who were given the option to buy shares via Deliveroo’s app. Retail investors will only be able to trade the stock from April 7.

IPO Details

Deliveroo and investors sold 384.6 million shares at the offer price, equal to a 21% stake. The company raised 1 billion pounds, while shareholders including Amazon.com Inc. and Shu, the founder, sold the remaining 500 million pounds of stock.

The prospectus indicates Amazon was looking to sell 23.3 million shares in the offering. At the IPO price, this means it received proceeds of 90.9 million pounds, with its remaining stake valued at about 818 million pounds, according to Bloomberg News calculations.

Deliveroo is the largest IPO in the U.K. since e-commerce operator THG Plc’s 1.88 billion-pound listing in September.

Like THG, Deliveroo listed with weighted voting rights on the LSE’s standard segment and therefore can’t be included in indexes such as the FTSE 100, despite its size. While the stock will lose out on fund flows from passive strategies that track these benchmarks, the same situation hasn’t prevented THG’s shares from surging 26%.

Goldman and JPMorgan were joint global coordinators on Deliveroo’s IPO, while Bank of America Corp., Citigroup Inc., Jefferies and Numis Securities Ltd. were joint bookrunners.