DoorDash, riding on food delivery demand during the coronavirus crisis, looks set to raise hundreds of millions of dollars in new funding at a $15 billion valuation

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DoorDash, riding on food delivery demand during the coronavirus crisis, looks set to raise hundreds of millions of dollars in new funding at a $15 billion valuation
DoorDash CEO Tony XuTroy Wolverton/Business Insider
  • DoorDash is preparing to raise several hundred million dollars in new equity financing, The Wall Street Journal reported.
  • The new financing would peg the company's valuation at $15 billion, up from $13 billion in November.
  • The financing would push DoorDash's cash stockpile well above $1 billion — and would presumably push back its planned initial public offering.
  • The company has seen a surge in sales and market share as a result of the coronavirus crisis.
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DoorDash is set to cash in from the coronavirus-spurred spike in its business.

The food delivery service is finalizing plans to sell several hundred million dollars worth of private company shares to mutual fund companies T. Rowe Price and Fidelity as well as other investors, The Wall Street Journal reported Thursday. Assuming the deal goes through, the new funding round would raise the company's valuation to $15 billion. That's up from the $13 billion value investors gave it in November.

A DoorDash representative declined comment on the report.

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The new financing would seem to further postpone the company's planned initial public offering. DoorDash confidentially filed its IPO paperwork in February, but in early March, CEO Tony Xu indicated the company was in no hurry to go public.

Although it has consistently lost money in recent years — including an estimated $450 million loss on $1 billion in sales last year — Door Dash had $1 billion in cash on hand prior to the new funding, The Information said in a separate report. Meanwhile, the company expects to break even in the second quarter of this year, excluding certain costs, The Journal reported.

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DoorDash and other food delivery services saw a surge in sales after state governments put in place lockdown orders to try to control the COVID-19 pandemic. With people largely prohibited from dining at restaurants, many ordered food online for delivery instead. In April, food delivery sales nearly doubled from the year earlier, according to market research firm Second Measure.

But DoorDash in particular saw gains. As of April, it controlled 45% of the food delivery market, up from 35% in November, Second Measure reported.

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