DoorDash, the leading food delivery app in the US, filed its highly-anticipated IPO with the Securities and Exchange Commission on Friday, announcing plans to take the company public next month. Its filings revealed that the company made a massive revenue through 2020, as the pandemic made a lot of people rely on food delivery services.
However, through the nine months in question that ended on September 30th, the company recorded a net loss of $149 million and a net loss of $533 million for the same period in 2019. For the first nine months in 2020, DoorDash posted revenue of $1.9, a remarkable increase from the $587 million it recorded in 2019. The company now boasts more than 18 million customers, 390,000 merchants, and one million delivery workers, also known as “Dashers.”
For the second quarter of 2020, which ended on June 30th, the company recorded a profit of $23 million on revenue of $675 million. In the most recent quarter, it recorded a net loss of $43 million on revenue of $879 million. DoorDash is now valued at $16 billion, a giant leap from its $1.6 billion valuations in 2018.
DoorDash already has a name for its shares, which will be listed as DASH on the New York Stock Exchange. The company offers three classes of stock, with each offering varying voting shares. There is Class A, equivalent to one vote per share; Class B offers 20 votes per share; Class C offers no voting rights.
Co-founder and CEO Tony Xu explained that the company was founded with the mission of helping folks like his mother, who set out to make it on their own. He added the business was set up to help small businesses to compete and succeed, even in these changing times. He concluded that helping the cause of small businesses stacked against the big dogs was his mandate, CNBC reports.
The company has been embroiled in a controversy wherein it diverted tips from its delivery drivers directly to the company’s account. The company defended this practice by saying it paid its drivers more than competitors. However, it has since abolished the policy. According to research by Edison Trends, DoorDash currently has a large hold on the food delivery market, with a 48% market share.
The latest filing by DoorDash revealed interesting facts that future shareholders might be concerned about. Its history of net losses shows that the company may struggle with making profits in the future. It also stated that if its employees are recategorized as employees by federal or state legislation, its operation will be adversely affected and that revenue might dip.
The company is one of the numerous gig companies, among others like Uber and Lyft, that have spent huge funds fighting California’s AB5 law. If the law were to take effect, workers in these companies would be treated as regular employees entitled to benefits.
The company also projected what it termed unfavorable media coverage to affect its reputation. The company has been under scrutiny in recent months, with media outlets uncovering series of unfair business practices from the company.
DoorDash is seeking to revolutionize the food-delivery industry by utilizing drones and autonomous technologies. Last year, it partnered with GM Cruise Automation to test run food delivery using autonomous vehicles.