Doordash filed to take itself public on Friday, setting the stage for a blockbuster IPO by the end of this year.
The fast-growing food-delivery giant, which in just seven years has become the US’s No. 1 food-delivery service, said in a prospectus that its revenue tripled during the first nine months of the year to $1.92 billion as consumers hunkered-down at home increasingly ordered in for breakfast, lunch and dinner.
Doordash — whose rivals include Grubhub, Uber Eats and Postmates — reported its first-ever profit of $23 million on $675 million in revenue during the second quarter ended in June. For the third quarter ended Sept. 30, it fell back to a loss of $43 million on $879 million in revenue, according to the filing.
Over the past two years, Doordash’s growth has far outpaced that of Uber and Grubhub, rising from 17 percent market share to 50 percent as of October and unseating Grubhub as the No. 1 food delivery service, according to the prospectus. Grubhub held 39 percent market share as of January 2018, the filing states, citing Euromonitor International.
The Palo Alto-based company, whose backers include the struggling Japanese tech conglomerate Softbank, is seeking to raise $100 million and to list its shares on the New York Stock Exchange before the end of the year, the filing said.
Chief executive Tony Xu, who co-founded the company, said in a letter that “we could not have imagined how big a transformation this would become, and we are still in the early innings of this evolution of local commerce.” Some 390,000 businesses use Doordash and some 18 million consumers have placed orders on its platform the company said.
Doordash admitted its rise has been fueled by “substantial investments” in promotions that discount the fees consumers pay for ordering meal delivery. Nevertheless, for the full nine months ended Sept. 30, Doordash narrowed its net loss to $149 million from $533 million a year earlier.
Doordash, however, has also attracted regulatory scrutiny and activism among its gig workers who claim they are not paid fairly. The company said it faces litigation over pay issues, including how workers are tipped. The company also faces regulatory risks, as states including New York look to cap the fees food-delivery companies charge.
DoorDash’s filing comes as several high-profile tech startups including home rental giant Airbnb, e-commerce firm Wish and PayPal co-founder Max Levchin’s lending startup Affirm lined up for stock market debuts in December.
Doordash had confidentially filed for an IPO in February, following the likes of ride-hailing companies Uber and Lyft, which went public last year.
Goldman Sachs and JPMorgan are the lead underwriters for DoorDash’s IPO.
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