DoorDash IPO Tops $32 Billion Valuation On Share Price Topping Expectations

SoftBank-backed DoorDash priced its initial public offering (IPO) shares at $102 each on a valuation of $32.4 billion, the Financial Times reported on Wednesday (Dec. 9).

The pricing surpassed expectations of $90 to $95 a share. The new valuation makes the Silicon Valley startup the biggest individual public food delivery firm in the United States. Earlier in 2020, DoorDash had a private valuation topping $15 billion, up from $1.4 billion in 2018.

Tom White, senior research analyst at DA Davidson, told the news outlet that when DoorDash starts trading, three of the biggest digital food delivery firms will be operating “under the glare of public markets, and public company investors are less patient when it comes to ploughing millions and millions of dollars into marketing and promotional campaigns if it’s not going to yield profits and cash flow.” 

Goldman Sachs and JPMorgan Chase are leading the DoorDash IPO. The company is expected to begin trading on Wednesday (Dec. 9) under the ticker “DASH” on the New York Stock Exchange. 

This year has set records for public offerings, with in excess of $140 billion raised on U.S. exchanges. The last IPO records were set in the heyday of the dot-com boom in 1999, The Wall Street Journal said, citing Dealogic data. 

Following the IPO, SoftBank’s Vision Fund and Sequoia Capital will own more than 40 percent of DoorDash class A common stock. At the new IPO price, SoftBank will own a $6.4 billion stake, while Sequoia’s share will be worth almost $5.3 billion, according to the Financial Times.

Tony Xu, co-founder and chief executive officer of DoorDash, will own a stake worth $1.5 billion. He and co-founders Stanley Tang, Andy Fang and Evan Moore will retain control of the firm through special class B common stock with 20 votes a share.

In the quarter ending in June, DoorDash posted a profit of $23 million on revenues exceeding $675 million. The following quarter showed losses on elevated revenue of $879 million. The company had said earlier that it was anticipating a share price of $90 to $95. 

DoorDash’s S-1 filing with the Security Exchange Commission (SEC) indicated that the delivery startup had 18 million consumers, 390,000 merchants and 1 million “Dashers” in its ecosystem.