DoorDash, the country’s largest restaurant-delivery service, could sell shares at $102 apiece in an initial public offering Tuesday, according to multiple reports.
That gives the San Francisco company, which expects to trade on the New York Stock Exchange under the ticker DASH, a valuation of $32 billion based on how much common stock is currently held by shareholders. That valuation would be up to $38.7 billion on a fully diluted basis, which means including shares set aside for future compensation.
In June private investors valued DoorDash at at about $16 billion.
The company had previously set a range of $90 to $95 for its share price in a filing with the Securities and Exchange Commission.
DoorDash reaped huge benefits from the pandemic and shelter-in-place orders as homebound consumers used it to get hot food brought to their doorsteps.
“Technology has changed consumer behavior and driven a wave of demand for convenience,” the company said in a prospectus for investors. “Recent events have further accelerated these trends, pulling the future of e-commerce forward for businesses large and small.”
Revenues soared to $1.9 billion in the first nine months of 2020, compared with $577 million in the same period last year. During those three quarters, it lost $149 million compared to a loss of $534 million a year earlier.
Founded in 2013, DoorDash said it has 18 million customers, 1 million couriers or “Dashers,” and 390,000 merchants. It operates in the U.S., Canada and Australia.
DoorDash, along with gig companies Uber, Lyft, Instacart and Postmates, just notched a big victory in California with November’s passage of Proposition 22, which ensures that their workers will remain independent contractors. All the companies said they relied on the flexibility of this model, while observers pointed out that making the drivers and couriers employees would add hundreds of millions to the company’s expenses.
DoorDash noted in regulatory filings that its industry is fragmented and highly competitive. Consolidation has increased this year. Uber, which operates rival service Uber Eats, just closed on its $2.65 billion purchase of Postmates. Grubhub was acquired in June by Just Eat Takeaway of the Netherlands. DoorDash purchased Square’s Caviar meal-delivery division in 2019 for $410 million.
Sme analysts are already sour on DoorDash, concerned that it took a pandemic for the company boosts its fortunes — and that its business could crater when the pandemic ends.
Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid
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December 09, 2020 at 06:57AM
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DoorDash initial public offering could value meal-delivery company at more than $32 billion - San Francisco Chronicle
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