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DoorDash Inc.Will sell its shares to the public

Its revenue reflects a surge in delivery demand. Last year, DoorDash generated $ 858 million in revenue.

New York — Delivery giant DoorDash Inc. plans to take advantage of the growing trend of consumers accepting app-based deliveries to sell their stock to the public as many people around the world stay home during the pandemic. doing.

The San Francisco-based company has filed a document stating its intention to go public on Friday.

“Technology has changed consumer behavior and driven a wave of demand for convenience,” the company said in its prospectus. “Recent events have further accelerated these trends and advanced the future of e-commerce for large and small companies.”

Its revenue reflects a surge in delivery demand. Last year, DoorDash generated $ 858 million in revenue. During the first nine months of 2020, revenue more than doubled to $ 1.9 billion. It was already growing before the pandemic. In 2018, it generated $ 219 in revenue.

However, DoorDash has been losing money every year since its inception, and the company warned potential investors that losses could continue as the company expects higher costs. The net loss in 2019 was $ 667 million and the net loss in the first nine months of 2020 was $ 149 million.

DoorDash expects to spend significant resources on platform development, including “expanding platform offerings, developing or acquiring new platform features and services, expanding into new markets and regions, and strengthening sales and marketing efforts.” I said that I am.

Related: Uber Acquires Postmates for $ 2.65 Million All Share Trading

Related: DoorDash data breaches affected 4.9 million consumers, workers and merchants

Founded in 2013 in Palo Alto, California, DoorDash has more than 18 million customers and 1 million “dashes” in the United States, Canada and Australia. The network has over 390,000 merchants.

The announcement came a week after the delivery company’s big win in California, with voters passing Proposal 22. This allows app-based delivery companies to treat drivers as contractors rather than employees. Before that, they faced a future in which drivers had to be treated as employees who could take advantage of costly benefits such as overtime and sick leave. Vehicle dispatchers and delivery companies have won exceptions, and instead they offer limited benefits, such as healthcare subsidies, to drivers who time 25 hours a week.

Wedbush analyst Daniel Ives said it was clear that DoorDash was waiting for the IPO process to begin before it voted for Proposal 22 in California. “If Proposal 22 didn’t pass in California, it would have been a difficult fight,” Ives said. “It puts a dark cloud in the rearview mirror and really opens the plug for the investor’s appetite.”

DoorDash says it has won 50% of the US food delivery market, followed by Uber Eats, Grubhub and Postmates. However, the company warned that the food delivery market is “fragmented and fiercely competitive” and that competitors have acquired or strategically agreed to cooperate. “In addition, some of our competitors have recently acquired a kitchen that can produce food and deliver it directly to consumers,” the company said.

Wedbush analyst Daniel Ives expects DoorDash and its major competitors to grow further next year as new coronaviruses surge in most of the United States and elsewhere in the world. DoorDash could start making money in 2021, he said.

“The gold mine of growth is this COVID pandemic. Given that it is the central artery for consumers in the United States and around the world to get food, the growth rate is two to three times that of the best scenario. Become. .”

DoorDash is expected to continue to grow in the next 12-18 months, as the virus worsens and perhaps somehow regains a pandemic blockade in the United States and other markets.

“No industry has benefited more than food delivery,” he said. “In a terrifying background, the silver lining was a big plus for these workers, drivers and restaurants who could use companies like DoorDash in this environment from an economic point of view.”

DoorDash has not yet disclosed how many shares it will sell or what it wants to generate with this offering.

Co-founder and CEO Tony Xu said at a Chinese restaurant as a child, after his family moved from China to the United States, while his mother, who was a doctor in China, was serving food. He said he helped wash the dishes. “DoorDash exists today to empower people like my mother who came here with the dream of making it ourselves,” he said.

DoorDash Inc.Will sell its shares to the public

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