DoorDash filed paperwork for its much-anticipated initial public offering on Friday, disclosing rapid growth during the pandemic and plans to expand beyond food delivery.
As CNBC reports, “Food delivery has been a rare bright spot during the pandemic as consumers avoid restaurants and stay at home, sometimes under local restrictions to contain the virus. GrubHub’s stock, for example, has shot up more than 49% year to date, while the S&P 500 has grown about 9.5%.”
For Doordash, that translated into $1.9 billion in revenue for the nine months ended Sept. 30, up from $587 million during the same period last year, according to its IPO prospectus.
The nation’s largest food-delivery player also posted a surprise profit of $23 million in the three months ended in June. While it switched to a net loss of $43 million in the quarter ended in September, that was a fraction of the $152 million loss in the year-earlier quarter.
DoorDash, which was founded in 2013, warned that the pandemic-fueled growth spurt might not last and that it expects growth rates for revenue and orders to fall in the future. The New York Times, moreover, said its performance “renewed questions about whether ‘gig economy’ businesses, which rely on armies of contract workers, can turn a profit.”
“There’s simply not enough value created in these businesses to reward consumers, couriers, restaurants, employees and shareholders,” said Len Sherman, an adjunct professor at Columbia Business School.
But the company said in its prospectus that “we believe we are in the early phases of broad market adoption,” noting that it generated $8 billion in gross order value last year while Americans spent a total of $302.6 billion on off-premise dining.
CEO Tony Xu also told investors that DoorDash is seeking “to build products that transform the way local merchants do business and enrich the communities in which they operate.”
“While food itself is a category that has a long runway for growth, we believe the network we have built ideally positions us to fulfill our vision of empowering all local businesses to compete in the convenience economy,” he said.