DoorDash is in talks with banks to open a line of credit for $400 million ahead of a possible IPO, according to an article published on Bloomberg late Thursday.
As the article notes, securing a line of credit from Wall Street is common before an IPO. Sources for the Bloomberg article, who were not identified because the news isn’t yet officially public, said JPMorgan Chase & Co. is leading the potential financing. DoorDash could go public as early as next year, according to those sources.
Should that happen, the company will join rival third-party delivery companies Grubhub and Uber Eats on the public market.
Just last week, San Francisco-based DoorDash acquired food delivery service Caviar from Square for $410 million, and in 2019 alone DoorDash has raised $1 billion and become the first third-party delivery service with a presence in all 50 U.S. states.
The successes don’t come without controversies, though. DoorDash has also been under fire for its controversial tipping practices for workers and recently had to change its policies around tipping in the wake of a storm of bad press.
Nor is DoorDash the only third-party delivery service to be steeped in controversy of late. Grubhub’s summer has been chock-a-block with criticism around its fees for restaurant structures as well as accusations of cybersquatting and calls for an antitrust investigation into the company.
Uber Eats hasn’t recently had so many ethical thorns in its side, but parent company Uber just posted $5.2 billion in losses for the second quarter, and Uber CEO Dara Khosrowshahi said he didn’t expect Uber Eats “to be profitable in the next year or year after frankly.”
If DoorDash does move forward with an IPO next year, it will face the same struggles around profitability its rivals Uber Eats and Grubhub currently grapple with. Ultimately, that issue of profitability could have more sway over the long-term viability of these companies than any criticism over tipping policies or restaurant fee structures.