DoorDash Prepares For IPO
Food delivery companies have seen business surge this year as Covid-19 has prevented many people from dining out at their favorite restaurants.
The last few months alone has seen a pair of deals in the food delivery space as Just Eat Takeaway acquired Grubhub in a $7.3 billion all-stock deal in June. Uber had also been in discussions to acquire Grubhub but a deal fell apart over antitrust concerns. Uber responded by acquiring food delivery company Postmates in July in a $2.65 billion all-stock deal.
DoorDash, which is the U.S leader in the food delivery market, filed its IPO prospectus with the U.S. Securities and Exchange Commission on Friday as it prepares to trade on the New York Stock Exchange under the symbol DASH. The company has raised about $2.5 billion so far and was most recently valued at $16 billion.
DoorDash and its subsidiaries accounted for 49% of U.S. meal delivery sales in September, according to Second Measure. DoorDash held a more than 50% market share in September in four of the top 12 metro areas by population, while holding a more than 30% market share in ten of the twelve.
DoorDash reported $1.9 billion in sales so far this year through September, compared to $587 million through the first nine months of last year. DoorDash also saw its net loss shrink to $149 million through September compared to a net loss of $533 million during the same period last year.
The company now has more than 18 million customers, including more than 5 million paying for its $9.99 per month service called DashPass, which gives customers free delivery. DoorDash said it has more than 1 million delivery employees known as "Dashers."
The IPO will bring three classes of stock. Class A shares grant shareholders one vote per share, Class B shares grant shareholders 20 votes per share and Class C shares will have no voting rights. Co-founder and CEO Tony Xu is expected to enter into an agreement with two other co-founders that would give him the ability "to direct the vote and vote the shares" they hold.
DoorDash made it clear the growth seen as a result of the pandemic is unlikely to last.
"The circumstances that have accelerated the growth of our business stemming from the effects of the Covid-19 pandemic may not continue in the future, and we expect the growth rates in revenue, Total Orders, and Marketplace GOV to decline in future periods," DoorDash said in the filing.
As DoorDash prepares to go public and attract more capital, it may not be long before the company continues the recent trend of consolidation in the industry.
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