DoorDash’s stock got the much sought after pop after the startup IPOd on the New York Stock Exchange today. DoorDash shares were priced at $102, and started trading at $182 today, giving the third-party delivery company a market cap of $57.8 million.
Founded in 2013, DoorDash had raised $2.5 billion in funding prior to going public. Today’s IPO puts a bow on what has been a busy year for the third-party delivery service. The COVID-19 pandemic forced closures of dining rooms at restaurants, pushing those businesses to offer more takeout and delivery options. That plus stay-at-home orders earlier in the year had more people order delivery around the country and translated into a lot more business for DoorDash. As CNBC writes:
DoorDash reported $1.9 billion in revenue for the nine months ended Sept. 30, according to its IPO filing. That’s up from $587 million during the same period last year. As its revenue grew, DoorDash also narrowed its net loss to $149 million over the same period in 2020. In 2019, DoorDash had a net loss of $533 million over the nine-month period.
In addition to coronavirus-driven business, DoorDash also expanded into new categories beyond its core delivery business. As the restaurant industry cratered, DoorDash added delivery from drug stores, convenience stores (it’s even building its own brand of delivery only convenience stores) as well as on-demand grocery delivery.
DoorDash’s road to IPO hasn’t been without its controversy, however. The high commissions that DoorDash and other third-party delivery services charge restaurants came under even closer scrutiny earlier this year as restaurants just tried to survive the initial fallout from the pandemic. Some cities even implemented fee caps to help restaurants stay afloat. DoorDash was also a backer of Prop 22, a California ballot measure that sought to get gig-economy services exempted from Assembly Bill 5, which requires companies to reclassify contract workers as employees (thereby giving them benefits and more protections). That measure passed. And just last month, DoorDash agreed to pay a $2.5 million to the Washington D.C. attorney general’s office as a settlement over its tipping policies.
DoorDash now joins other publicly traded third-party delivery services such as Uber and GrubHub.