Market Overview

DoorDash IPO: 5 Key Takeaways Investors Need To Know

DoorDash IPO: 5 Key Takeaways Investors Need To Know

DoorDash filed its IPO prospectus Friday morning. Here is an early look at the figures and information from the company, which is expected to IPO before the end of the year with the symbol DASH.

DoorDash was valued at $16 billion in an early funding round in 2020. The company raised $400 million in June. Friday’s prospectus says the company will raise $100 million, which is likely a placeholder.

Largest Player in Market: DoorDash has the no. 1 market share position in the food delivery market, with over 18 million customers and partners with more than 390,000 merchants.

DoorDash competes with Uber Eats, owned by Uber Technologies (NYSE: UBER), Grubhub Inc (NYSE: GRUB) and Postmates.

Grubhub is merging with Just Eat, a European company and Postmates is merging with Uber Eats.

In January 2018 DoorDash had 17% market share versus 27% from Uber Eats and 39% for Grubhub. In October 2020, DoorDash had 50% market share versus 26% for Uber, 16% for Grubhub and 7% for Postmates.

Going forward, it looks like DoorDash and Uber Eats will be the two large players with 50% and 33% market share, respectively.

Lyft Inc (NASDAQ: LYFT) recently announced its intentions to enter the retail delivery market.

Related Link: Should Investors Get Ready For DoorDash, Instacart IPOs?
Huge Addressable Market: The restaurant delivery business is a growing market. In 2019, $1.5 trillion was spent on food and beverages in the United States. Of that total $600.5 billion was spent at restaurants.
DoorDash is targeting the off-premise market of restaurants which was worth $302.6 billion in 2019.
In 2019, DoorDash had total transaction volume of $8 billion, which represented less than 3% of the market.

Order Volume Growth: In fiscal 2019, DoorDash had 263 million orders placed, which was year-over-year growth of 217%.

In fiscal 2020, the company has had 543 million orders placed in the first nine months. The company saw 103 million, 204 million and 236 million orders placed for the first three months, respectively. The increase was primarily driven by a 217% increase in Total Orders to 263 million, which led to a 186% increase in Marketplace GOV to $8.0 billion

Financials: In fiscal 2019, DoorDash had revenue of $885 million, which grew from $291 million in fiscal 2018.

In the first nine months of 2020, DoorDash revenue was $1.9 billion, which was up from $587 million in the prior year’s comparable period.

DoorDash reported a net loss of $149 million for the first nine months of 2020. The company reported a net loss of $667 million in fiscal 2019.

Growth Plans: One of the ways DoorDash could grow is with its subscription program. The company offers Dash Pass at $9.99 a month offers unlimited deliveries for users. The company counts 5 million Dash Pass members now, which it expects to grow from the value it offers to consumers.

DoorDash said growth will come by adding more merchants, more consumers and having more consumer engagement.


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