DoorDash is close to securing a new round of funding that would value the company at over $15 billion, according to the Wall Street Journal, which cited sources close to the matter.
The delivery service plans to sell hundreds of millions of equity to its exiting backer T. Rowe Price Group Inc. as well as Fidelity Investments. Softbank, which already backs DoorDash via its Vision Fund, is also considering participating. WSJ notes that the exact size of the deal and the full roster of investors is not fully finalized.
Right now, DoorDash holds the number one spot in the U.S. in terms of market share for third-party delivery. The company filed to go public in February of this year, and according to the WSJ is still planning on a listing for 2020. DoorDash is also expected to break even this quarter, which would mark the first time the company has done so and also further push the service down the path to profitability.
All that said, DoorDash is going to have to work hard to defend that number one spot. News of this potential funding comes on the heels of Just Eat Takeaway announcing its $7.3 billion acquisition of Grubhub. While Just Eat Takeaway CEO Jitse Groen didn’t name specific names, in an interview this week he called out “irrational” competitors “giving food away for free,” which is a tactic DoorDash has used (via deals and promotions for customers) to push its way into new markets. Groen said the combined forces of Just Eat Takeaway and Grubhub plan to “push back” on the competitors.
The Grubhub-Just Eat Takeaway deal still has to be approved by company shareholders. Meanwhile, the WSJ said DoorDash’s potential funding round “could still fall through.”
But if both go through, rather than fall through, the third-party delivery market will become even more competitive than it’s been previously. A shift to off-premises orders as restaurants deal with reduced capacity in dining rooms and customers wary of eating out will only intensify that competition.