DoorDash, the biggest US food delivery company, begins trading on Wall Street on Wednesday.
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On the evening before becoming a publicly traded company, DoorDash has upped its share price to around $102, according to the Wall Street Journal. That’s more than the $75 to $85 target range it initially set last month and means the food delivery company would reportedly be valued at about $39 billion.
Those numbers are far higher than were projected earlier this year when DoorDash was privately valued at about $16 billion. While the company is not yet profitable, investors say its massive growth shows promise. In filings with the US Securities and Exchange Commission last month, DoorDash reported revenue gains, decreases in losses and a rising supply of customers, merchants and delivery workers.
“If we can make possible the delivery of ice cream before it melts, or pizza before it gets cold, or groceries in an hour, we can make the on-demand delivery of anything within a city a reality,” DoorDash CEO and co-founder Tony Xu wrote in a letter included with the filing.
The past few months have been booming for DoorDash, as the coronavirus has caused people around the world to shelter-in-place and stay indoors. The San Francisco-based company has gained millions of customers who avoid going to restaurants and instead order their meals through the platform. Taking advantage of this timing, DoorDash has expanded from just restaurant deliveries to grocery, pet store and convenience store deliveries too.
DoorDash’s business isn’t without risk, however. In its federal filing, the company said it faces fierce competition from companies like Uber and Grubhub. DoorDash also said its operations could be hurt if its delivery workers — or Dashers, as the company calls them — are reclassified as employees. That would mean it’d be beholden to payroll and benefits costs, as well as any discrimination claims or employee benefit claims that may arise.
Another risk factor to its business, DoorDash said in the filing, is its ability to “cost-effectively attract and retain Dashers.” The company added that “negative perception of our platform or company may harm our reputation, brand, and local network effects.” Last month, the company settled a lawsuit with Washington, DC, over allegedly deceptive business practices where it withheld tips from delivery workers.
“We’re pleased to have this issue behind us,” a DoorDash spokeswoman told CNET at the time.
DoorDash plans to begin trading on the New York Stock Exchange on Wednesday under the symbol DASH. Goldman Sachs and JPMorgan Chase are leading the IPO.
