Deliveroo expects its forthcoming flotation to value the company at up to £8.8bn, about £1bn more than initially forecast and putting it on course to be the biggest London stock market debut since Glencore almost a decade ago.

Will Shu, the founder of the meal delivery service, which is backed by Amazon, is expected to cash in 6.7m shares worth up to £30m when the company launches on the stock market on 7 April. He will retain a 6.3% stake, worth about £550m. Existing shareholders, including Amazon and private equity firms Bridgepoint, Index and Greenoak, will cash in shares worth £536m, according to the group’s prospectus published on Monday.

Deliveroo said in a trading update that it was continuing to benefit from the food home delivery boom during the latest national Covid-19 lockdowns.

The total value of transactions processed on its platform surged by 130% year on year in January in the UK and Ireland, and 112% in other markets. Overall growth across all markets stood at 121% for the period.

Deliveroo also announced that it had priced its initial public offering at between £3.90 and £4.60 a share. The price range values the business, which has never made a profit, at between £7.6bn and £8.8bn.

This would make it the biggest London Stock Exchange debut since the mining company Glencore floated in May 2011.

At the top end of the proposed price range, Deliveroo would be worth more than the Premier Inns and Beefeater owner, Whitbread (£6.6bn), the luxury goods group Burberry (£8.2bn), the housebuilder Barratt Developments (£7.8bn) and the broadcaster ITV (£4.9bn).

It would also be more valuable than J Sainsbury (£5.4bn) and Marks & Spencer (£3bn) combined. Deliveroo’s rival Just Eat Takeaway, which is now in the FTSE 100 and joined the stock market in 2014 worth £1.5bn, currently has a market capitalisation of £10.2bn.

“We are proud to be listing in London, the city where Deliveroo started,” said Shu.“Becoming a public company will enable us to continue to invest in innovation, developing new tech tools to support restaurants and grocers, providing riders with more work and extending choice for consumers, bringing them the food they love from more restaurants than ever before,” he said. “This will help us in our mission to become the definitive food company.”

The company, which plans to raise £1bn from its stock market flotation, announced its intention to list on the London stock market this month.

Deliveroo is also giving customers who have placed at least one order the chance to buy shares in the business, with what it calls “loyal” customers being given priority. The company has put aside £50m of shares for customers to purchase.

Deliveroo is also planning to launch a £16m “thank you fund” for a quarter of its riders, with those delivering the most orders set to receive up to £10,000. However, unions representing riders said the fund is “no compensation for bad pay”.

Alex Marshall, the president of gig workers’ union IWGB, said: “Deliveroo’s £8.8bn evaluation is an insult to key workers here in the UK who kept riding right through the pandemic. So too is the fact that, denied worker status, riders aren’t even eligible for shares in Deliveroo, which has instead offered a one-time tip as though that compensates for years of precarity and poverty. Riders deserve more.”

Last week it emerged that gig economy companies, including Uber and Deliveroo, have faced at least 40 major legal challenges around the world as delivery drivers and riders try to improve their employment rights. The cases have been brought by gig economy workers seeking access to basic rights, such as minimum wages and holiday pay.

Uber said it would start making these payments, following a supreme court ruling confirming worker status in the UK for its drivers. Just Eat has also pledged to stop using the gig economy model. Documents released before its IPO revealed that Deliveroo had set aside more than £112m to cover potential legal costs relating to the employment status of its delivery riders.