US delivery giant DoorDash unveils plans for IPO
Delivery giant DoorDash Inc is planning to sell its stock to the public, capitalizing on the growing trend of consumers embracing app-based deliveries as much of the world stays home during the pandemic.
The San Francisco-based company filed papers signaling its intent for initial public offering 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, pulling the future of e-commerce forward for businesses large and small.”
Its revenues reflect the explosion in demand for delivery. Last year, DoorDash generated US$885 million in revenue. During the first nine months of 2020, revenue more than doubled that to US$1.9 billion. It was already growing before the pandemic. In 2018 it brought in US$291 million in revenue.
But DoorDash has lost money each year since its founding and the firm warned potential investors the losses could continue as the company anticipates increasing expenses. It had a net loss of US$667 million in 2019 and US$149 million in the first nine months of 2020. The company did turn a profit of US$23 million in the second quarter this year, but followed that with a US$43-million loss in the third quarter.
DoorDash said it expects to spend substantial resources developing its platform, including “expanding our platform offerings, developing or acquiring new platform features and services, expanding into new markets and geographies, and increasing our sales and marketing efforts.”
DoorDash, which was founded in 2013 in Palo Alto, California, has more than 18 million customers and 1 million “dashers” who deliver food in the United States, Canada and Australia. It has more than 390,000 merchants in its network.
The announcement came a week after delivery companies scored a major victory in California, where voters passed Proposition 22, which allows app-based delivery companies to treat drivers as contractors instead of employees.