DoorDash Begins U.S. IPO Pursuit

Nov. 19, 2020 5:35 PM ETDoorDash, Inc. (DASH)AMZN, GOOG, GOOGL, JTKWY, POSTM, UBER15 Comments

Summary

  • DoorDash has filed to raise $100 million in an IPO, although the final figure may be as high as $2 billion.
  • The firm provides last-mile transportation services to local retailers in the U.S., Canada and Australia.
  • DASH has grown markedly as a result of the Covid-19 pandemic's effects on consumer purchasing behavior.
  • But, what happens to its growth once the pandemic is brought under control?
  • Looking for more investing ideas like this one? Get them exclusively at IPO Edge. Get started today »

This article was amended on 11/20/2020 to reflect a correction related to the CEO's experience.

Quick Take

DoorDash (NYSE:DASH) has filed to raise $100 million in an IPO of its Class A common stock, according to an S-1 registration statement.

The firm provides last-mile product transportation services to local retailers in the U.S., Canada and Australia.

DASH has produced very strong growth due to the effects of the Covid-19 pandemic, but future growth post-pandemic is a question.

I'll provide a final opinion when we learn more about the IPO.

Company & Technology

San Francisco, California-based DoorDash was founded to enable local retailers to provide delivery capabilities via the firm's mobile app and logistics platform.

Management is headed by co-founder and CEO Tony Xu, who received an M.B.A. from the Stanford GSB.

Below is a brief overview video of the DoorDash IPO by CNBC:

Source: CNBC Television

The firm counts over 390,000 merchants, 1 million 'Dasher' delivery persons and over 18 million users.

DoorDash has received at least $2.26 billion from investors including SVF Fast, Sequoia Capital and Greenview Investment Pte.

Customer/User Acquisition

The company obtains new users via online marketing and word of mouth.

It acquires new merchants via online marketing, inside sales and direct sales efforts depending on the size of the merchant network.

Sales and Marketing expenses as a percentage of total revenue have been uneven but dropping in the most recent reporting period as revenues have increased sharply, as the figures below indicate:

Sales and Marketing

Expenses vs. Revenue

Period

Percentage

Nine Mos. Ended Sept. 30, 2020

31.8%

2019

67.1%

2018

46.4%

Source: Company registration statement

The Sales and Marketing efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of Sales and Marketing spend, more than doubled to

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This article was written by

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