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Summary
- DoorDash Inc filed for an initial public offering on Friday, November 13.
- The online food delivery showed a substantial rise in its revenue this year.
- The company had confidentially applied for a public listing back in February.
- DoorDash reported a revenue of US$ 1.9 billion in the nine months ending September 2020.
- DoorDash has 18 million+ customers, 390000+ merchants and 1 million+ delivery agents ‘Dashers’.
Top US food delivery app Doordash Inc created quite a buzz last week after it filed for its initial public offering with the US Securities and Exchange Commission on Friday, November 13. The company has listed a preliminary offering of US$ 100 million. Back in June 2020, though, DoorDash had raised a valuation of about US$ 16 billion.
Doordash Inc had confidentially applied for a public listing back in February.
What Is DoorDash?
DoorDash was founded in July 2013 by a bunch of Stanford students –– Tony Xu, Stanley Tang, Andy Fang and Evan Moore. It is an on-demand door-to-door food delivery service that customers with local restaurants in their city. DoorDash is available in major US cities such as New York, Los Angeles, Las Vegas, San Francisco, etc. It also provides services in Canada.
DoorDash has the backup of major venture capital companies such as Sequoia Capital, Charles River Ventures, Kleiner Perkins, Khosla Ventures.
It also has subsidiaries such as online food delivery company Caviar, and tele-operations company Scotty Labs Inc.
DoorDash Financials
As the coronavirus pandemic-led lockdown confined people to their homes, the rise of a homebody economy made online delivery more of a necessity than a luxury for many. Hence, online food delivery became one of the few industries that boomed amid the COVID-19 outbreak.
Benefitting from this boost, DoorDash reported a revenue of US$ 1.9 billion in the nine months ending September 2020, up from US$ 587 million in the same period in 2019. Its gross profit for the nine months ending September 2020 stood at US$ 944 million, up from US$ 219 million in the same period in 2019.
In its financial report filed with the US SEC, DoorDash recorded a gross margin of 49 per cent for the nine-month period ending September 2020. This was also a significant year-over-year increase from the gross margin of 37 per cent in the nine-month period ending September 2019.
It also incurred a net loss of US$ 149 million in the nine months ending September 2020. However, this was lowered from that of US$ 533 million in the same period last year. DoorDash’s adjusted EBITDA stood at a positive US$ 95 million, while its adjusted EBITDA margin was five per cent in the nine months ending September 2020.
On a quarterly basis, DoorDash saw a revenue of US$ 879 million in the quarter ending September 2020, up from US$ 675 million in the June quarter.
DoorDash said in its SEC financial report that, as of September 2020, it has a customer base of more than 18 million, more than 390,000 merchants and over one million delivery agents, whom the company refers to as ‘Dashers’. As of October 2020, the company said that it also tops the chart of US Category Share by data firm Edison Trends based on total sales.
Earlier in October, DoorDash Inc reported its first economic impact report ever that it had generated a revenue of US$ 13.2 billion from restaurants and deliveries in 2019. The tech company estimated that it made about US$ 6.9 billion in net new impact on the US economy last year.
What’s Next For DoorDash IPO?
The San Francisco-based company has hinted at the use of autonomous and drone delivery technologies in the future of the food delivery industry. Last year, DoorDash had teamed up with GM’s Cruise Automation for a test drive of deliverying food using autonomous vehicles in San Francisco.
As its prospectus gets scrutinized by the securities commission, DoorDash will be most likely filing an application for its stock exchange listing. The company is planning for a public listing on the New York Stock Exchange under the tick of “DASH”.
Upcoming Major IPOs
The second half of 2020 has turned out to be a busy season for IPOs. A recent Ernst and Young report estimated a 14 per cent year-to-date rise in the total number of IPOs filed globally this year. The report added that in North and South America alone, the total IPO activity raised about US$ 62.4 billion in proceeds.
Two major IPOs that were being major anticipated were that of Chinese tech giant Ant Group and Bumble Inc.
Jack Ma’s Ant Group was set to raise US$ 34 billion and become the world’s largest stock market debut on record with its dual listing. However, Ant Group’s IPO dreams derailed after Chinese authorities suspended it earlier in November. In a dramatic turn of events, the Shanghai stock exchange announced on November 3 that it has decided to suspend Ant Group’s IPO due to certain regulatory issues. The Hong Kong exchange followed suit soon after.
Bumble Inc is reportedly heading for an IPO as early as the first quarter of 2021. The popular dating app is estimated to raise up to US$ 8 billion in its IPO, though the Austin-based company itself hasn’t revealed any finalized plans yet.
Bumble is said have almost 100 million users spanning across 150 countries and around 100,000 fresh users joining the app every day.
American investment firm Blackstone Inc reportedly purchased a majority stake in Bumble’s parent company MagicLab last year in November.
