Is Doordash the ultimate IPO for 2020?| North Loop Official Blog
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11 Dec 2020

Is Doordash the ultimate IPO for 2020?

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In what turns out to be the busiest months for IPOs, the American food delivery company DoorDash Inc has managed to hit the headlines for all the right reasons since their Initial Public Offering on December 10th. Their debut on the stock market has been nothing short of stunning, yielding close to 86% returns to investors, closing at $189.51 on Wednesday.
Doordash was expected to sell shares at $102 and was not expected to rake in skyrocketing returns as they did on Wednesday.

This tremendous performance on day 1 has boosted DoorDash’s market valuation by over four times to $59 Billion, giving rise to three new billionaires- CEO Tony Xu and his fellow co-founders Andy Fang and Stanley Tang

More about Doordash-

Doordash is a platform wherein customers can order food from some of their favorite restaurants across various cuisines and have it delivered on their doorstep. For a company that has been flagged by restaurants for their exorbitant list of charges, Doordash has actually benefitted a lot from the spike in demand attributed to the pandemic boom. Doordash is now only the third-highest VC-backed company in terms of valuation behind Facebook and Uber to go public. Founded in 2013, the company has managed to materialize a previously unthinkable business model and has managed to provide a backbone like support to restaurants that have taken a severe hit due to the pandemic.

Despite cut-throat competition from companies like Uber Eats and Grubhub, Doordash has a major chunk of the American food delivery market share and the company is looking to expand further into many untapped markets that could help provide a major lead ahead of its competitors. Doordash has more than 175 of the largest US restaurant brands under its belt, helping it gain an edge over its competitors by providing a wider choice to customers.

Doordash has over 300,000 restaurants partnered with them and has its presence in over 4000 cities, catering to over 20 million customers. The company amassed an estimated revenue of close to $1 Billion in 2019 and within just the first nine months of 2020, the company has amassed a revenue of close to $1.92 Billion. The company, as of the third quarter of 2020, has managed to see a 268% sales growth year over year, and their orders have surged from 181 million to 543 million in September.

Due to the onset of the covid-19 pandemic, Doordash has gone out of its way to provide all eligible delivery drivers (diagnosed with covid-19 or quarantined) up to two weeks of financial aid in the US, Australia, and Puerto Rico. The company has also waived or reduced commission fees for local restaurants and has brought close to 100,000 independent restaurants on board for free to help generate revenue.

Despite such a strong performance, the company is seen to have been burning through cash quickly and the company has lost close to $149 million within the first 9 months of 2020.
Profile image2: More about Doordash-
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Future of Doordash-

The company now is expected to expand beyond food deliveries, to delivering items from medical stores, convenience stores, and grocers, which can help the company inch closer to profitability.

The company has also hinted at a completely driverless future, with its plans to make use of drones and autonomous vehicles to carry out deliveries.

Investment milestones-

The company has managed to raise close to $2.5 billion from eleven funding rounds since inception, of which five are mentioned below-

On March 22, 2016, Doordash managed to raise $127,000,000 in Series C funding.

On Aug 16, 2018, Doordash managed to raise $250,000,000 in Series E funding.

On Feb 21, 2019, Doordash managed to raise $400,000,000 in Series F funding.

On Nov 13, 2019, Doordash managed to raise $100,000,000 in Series G funding.

On Jun 18, 2020, Doordash managed to raise $400,000,000 in Series H funding.

Competitors-

Doordash faces competition from companies such as Uber Eats, Grubhub, Postmates, etc.

Conclusion-

What started as a small idea in 2013 by Stanford students is worth several billion dollars today. A business model that was almost unthinkable has now materialized, making Doordash easily one of the biggest corporations in the United States. The plans the company has for its future is truly way ahead of the curve, making Doordash a popular choice among investors.

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