DoorDash seeks $400 million in pre-IPO funding round
The Sequoia-backed food delivery company says investors participating in the Series H funding round value the brand at $16 billion
Food delivery company DoorDash is raising $400 million in a Series H financing led by new investors Durable Capital Partners LP and Fidelity Management & Research Co. Funds and accounts are advised by T. Rowe Price.
“We are thrilled to team up with investors who share our mission to empower local economies,” DoorDash said in a statement. “The investment, which also includes support from many of our existing investors, values DoorDash at almost $16 billion.”
The announcement comes on the heels of paperwork filed in February with the US Securities and Exchange Commission towards becoming a public traded company. Plans were put on hold due to the Covid-19 pandemic.
DoorDash’s renewed IPO drive builds on a period of bonanza in the business, as Covid-19 lockdown has created an increased demand for food delivery,
Last week Just Eat Takeaway.com agreed to acquire US-based Grubhub for $7.3 billion in a deal that would create one of the world’s largest meal-delivery companies.
DoorDash growth plans
For Henry Ellenbogen of Durable Capital Partners LP, DoorDash has pioneered a unique logistics platform that facilitates the delivery of food, groceries, and household essentials. “[The company] has become ingrained in the lives of local communities as an essential service,” he said, adding the firm is “excited to invest in this excellent team”.
DoorDash was founded in 2013 by Andy Fang, Evan Moore, Stanley Tang, and Tony Xu. The company is headquartered in California.
The company said in a statement that the new capital will support new products and services that help its merchants manage the changing operating environment. DoorDahs plans to offer customers convenient and safe ways of ordering and shopping, and enable ‘Dashers’ “to continue making meaningful, flexible income when they need it most”.
‘Dashers’, the brand name for its delivery drivers, have raised labour dispute against the company. DoorDash was ordered to pay $9.5 million 5,000 in arbitration fees for 5,010 delivery drivers’ labour demands.
According to business information platform Crunchbase, DoorDash has attracted $2.5 billion in funding to date. The company is backed by 26 investors, including Sequoia Capital, Y Combinator, Khosla Ventures, and SoftBank Vision Fund, to name but a few.
DoorDash’s full financial report hasn’t been disclosed, but according to The Information, the company is not profitable. Last December, the business was expected to lose $450 million on revenue of between $900 million and $1 billion in 2019.