DoorDash, the on-demand food delivery service, cannot stop delivering funding rounds, either.
The company has officially gone parabolic with a $600 million Series G on a stunning $12.6 billion valuation, a nearly 78% surge from its $7.1 billion valuation in February. Newcomer investors Darsana Capital Partners and Sands Capital joined existing investors Coatue Management, Dragoneer, DST Global, Sequoia, SoftBank‘s Vision Fund and Temasek.
DoorDash said Thursday that in 1Q, it saw an astronomical 280% YoY increase in annualized gross merchandise value to $7.5 billion. While not specifically stated in the company’s blog post, DoorDash confirmed in an email to PitchBook that the 280% increase is from March 2018 to March 2019.
The delivery service also reported operations in over 4,000 cities in the US and Canada, with a goal of growing to 100 Canadian cities by the end of the year, up from around 50 currently. Perhaps most pivotal in this regard was the company’s Series D in March 2018, which saw SoftBank’s Vision Fund leading a massive $535 million round. This funding injection reportedly allowed DoorDash to grow from its comparatively tiny 600-city footprint to the enormous list it now oversees.
While DoorDash was happy to expand so quickly thanks to the windfall, SoftBank is also happy to diversify its food delivery bets. The Tokyo-based firm is Uber’s largest shareholder, and in turn, has helped fund DoorDash’s competitor, Uber Eats.
Here’s a look at DoorDash’s funding history:
Profitability question
The topic of profitability is not mentioned in DoorDash’s blog post, continuing a wider investment trend of turning a blind eye to blood-red profit/loss statements in favor of pursuing industry disruption.
In hindsight, such priorities were apparent in DoorDash’s massive Series D round last year. In allocating the funds, geographical growth was favored over working toward a consistently profitable operation, allowing the company to uproot local, in-house delivery services at restaurants.
The company has also sought to achieve a presence through corporate partnerships and white-label services. For example, on May 2, Wyndham Hotels and Resorts announced a partnership to offer free DoorDash delivery services to guests staying in over 3,700 of the hotel company’s locations. Such a partnership complements DoorDash’s existing white-label services provided to dining chains such as Denny’s and Wingstop.
If DoorDash can continue striking high-profile corporate partnerships while replacing traditional in-house delivery employees at restaurants, a profitable business model could be worked out later to take advantage of an enormous established network.
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