DoorDash IPO Raises Over $3 Billion, but How Does It Compare to Its Competition?

By Bruce Harpham Thursday, December 10, 2020

DoorDash, the sharing economy delivery service, went public on December 9. The startup has raised over $3 billion in its initial public offering. In early trading, the company's market value rose to more than $60 billion. DoorDash's initial public offering (IPO) is considered one of the largest of 2020, exceeded only by the Snowflake IPO earlier in the year.

A View Inside DoorDash's Financials

According to a filing with the SEC, DoorDash's pre IPO financials indicate the company was growing but not yet profitable.

  • Customers. The startup reports that it has 18 million consumers and over 390,000 merchants on the platform. Merchants have earned approximately $19 billion in sales through DoorDash.
  • Dashers. DoorDash describes its contractors as "dashers," and the company states that it has more than one million contractors.
  • Significant Cash On Hand. As of September 30, 2020, DoorDash reported $1.6 billion in cash. That gives the company plenty of funding.
  • More Than Doubling 2019 Revenue. Thanks to its booming growth in 2020, the company has more than doubled its revenues. In the first nine months of 2020, DoorDash reported $1.9 billion in revenue (up from $587 million in the first nine months of 2019).
  • Losses Are Shrinking. Like other well-funded startups, DoorDash has not yet achieved profitability. However, the company is getting closer to getting in the blank. In the first nine months of 2020, the company reported a net loss of $149 million (vs. $533 million net loss in the same period of 2019).
  • Geographic Expansion. At first, DoorDash launched in Palo Alto, California, in 2013. The next year, the company expanded to the East Coast. Today, DoorDash is available in all 50 US states as well as Australia and Canada. As of late 2020, the company has delivery coverage for approximately 85% of the US population.

Since its founding, the company has fulfilled more than nine hundred million orders. As COVID-19 restrictions swept across the world, restaurants and consumers have increasingly relied on DoorDash for delivery.

How DoorDash Grew Through Acquisition

In its quest for rapid growth, DoorDash has also used acquisitions for growth. DoorDash acquired the company Caviar in 2019 for a deal valued at more than $400 million. Before its acquisition, Caviar had raised approximately $15 million in venture funding since its founding in 2012.

DoorDash Edges Ahead of the Competition

A few years ago, DoorDash was one of several companies aiming to provide restaurant delivery. In January 2018, DoorDash had a market share of 17% of the US market. By 2020, the company has grown its US market share to 50%. Over the same period, UberEats has held steady with approximately one-quarter of the US market.

Earlier this year, Uber announced that more than 500,000 restaurants are registered on Uber Eats. While UberEats has increased its revenues in 2020, the segment continues to report a loss. UberEats has also successfully signed deals with multiple fast-food chains, including A&W Restaurants (Canada), Baskin Robbins, Bojangles' Famous Chicken & Biscuits, Burger King (France & Spain), Domino's (France), Hungry Jack's (Australia), and Plenus (Japan). Also, UberEats is continuing to work on signing up small and medium-sized merchants.

How Much DoorDash Earns From Each Order

Fundamentally, DoorDash operates a marketplace with multiple participants: consumers, merchants, and dashers (i.e., delivery people). Assuming a customer paid $32.90 for an order, the revenue breakdown would have several parts. DoorDash would keep $4.90 (14.8% of the total). The merchant, such as a restaurant, would earn approximately $20.10 in revenue. Finally, the dasher delivery person would earn $7.90.

The share of revenue DoorDash earns from each order is a critical variable in its ability to become profitable in the long term. In contrast, Uber earns approximately 25% of the gross booking as revenue. DoorDash's lower revenue share likely reflects the need to compensate for two external parties (i.e., merchants and Dashers) rather than just one external party (i.e., Uber drivers).

DoorDash's Early Investors Have Done Well

Before becoming a public company, DoorDash has attracted significant investment from the venture capital community. In total, the company raised $2.5 billion in pre-IPO investment across eleven funding rounds. Some of Door Dash's investors have been waiting for nearly a decade for the IPO. In 2013, the company raised a $2.4 million seed round from investors such as SV Angel, Streamlined Ventures, Khosla Ventures, and CRV. Later, DoorDash attracted significant funding from prominent investors such as SoftBank in 2018 and T. Rowe Price in 2019.

About the Author


Headshot for author Bruce Harpham

Bruce Harpham is an author and marketing consultant based in Canada. His first book "Project Managers At Work" shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.

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