DoorDash is in the process of raising a $500 million funding round, according to the Wall Street Journal. The new funding puts the third-party delivery service’s valuation at over $6 billion. Singapore investment firm Temasek Holdings is expected to lead the round.
Prior to this, DoorDash had closed almost $1 billion total in funding, including a $250 million round last August co-led by Coatue Management and DST Global. The new funding would raise DoorDash’s total funding amount to nearly $1.5 billion since its founding in 2013.
The announcement comes right on the heels of news from last week that food delivery competitor Postmates had confidentially filed for an initial public offering (IPO). Uber, which includes the Uber Eats delivery service, also filed confidentially for an IPO back in December. The company has received initial feedback from the SEC about the filing. Grubhub, meanwhile, has been king of the food delivery market for some time, though the company saw slowed revenue growth and sinking shares in Q4 of 2018.
While all of this news doesn’t completely level the playing field, it certainly ups the suspense over who will ultimately dominate the food delivery space. I doubt we’ll know the answer right away. Instead, I expect 2019 to be a year of one company trying to unseat another repeatedly over the next several months as they expand into new territories and test out new technologies that might give them more dominance in the market. (Cue obligatory Game of Thrones metaphor.)
DoorDash is certainly on board with adopting new technologies, and the new funding could very well help the company further develop things like its self-driving car initiative or even something like drone deployment (something Uber has reportedly been dabbling in.) DoorDash last year posted a job listing for someone to help build “10x ideas from the ground up e.g. robotics, drones, next-gen dispatch, ML-chatbots, strategic partnerships, etc.” So drones likely are a part of the future, for DoorDash and probably every other delivery service mentioned in this post.
The service has also been at the center of controversy, though. Along with Instacart and Amazon Flex, DoorDash is reportedly taking tips from delivery workers and putting them towards those workers’ base pay, in order to meet the promised minimum. Instacart has since reversed the policy for its workers. As of this writing, however, DoorDash, along with Amazon Flex, will maintain its current policy, despite outcry from workers and customers alike.