DoorDash announced today it has launched the roadshow for its initial public offering (IPO). The company is offering 33,000,000 shares of its Class A common stock, with the initial public offering price expected to be between $75 and $85 per share, according to a company press release.
The San Francisco-based food delivery service confidentially filed for an IPO in February of this year and unveiled the public S-1 filing in November. The S-1 filing revealed that the company reported a profit for the first time in its history during the second quarter of 2020 — which coincided with the rise of the COVID-19 pandemic. It’s a noteworthy milestone in an industry that thrives on promising a profitability it hasn’t, for the most part, achieved yet.
For DoorDash, part of that trek towards profitability appears to be expanding its service to other areas of food delivery besides restaurants. In April, the company announced partnerships with major convenience stores, including Wawa and 7-Eleven, and in August, it launched a grocery delivery service. It even went as far as to open its own “ghost convenience store,” called DashMart, which is basically a virtual convenience store owned and operated by DoorDash.
Those new sales channels may be necessary at a time when the restaurant industry faces new restrictions to help curb the spread of the pandemic. It is difficult to say at this point how many restaurants will shutter permanently when all is said and done, and delivery services may need to branch out further to keep on the road to profitability.
According to the Wall Street Journal, DoorDash is aiming for a valuation of $25 billion to $38 billion. The company garnered $675 million in revenue and a profit of $23 million for Q2 2020. For Q3, it posted a net loss of $43 million for Q3, but still reported revenue growth of $879 million. The company has said in the past that COVID-19-related lockdowns have played a significant role in its growth. That could be the case for a long time yet.