US-based food delivery startup DoorDash announced it has completed a US$600 million funding round, taking its post-money valuation to US$12.6 billion from US$7 billion in February.
Competing against the likes of UberEats, Grubhub and Postmates, the company allows customers to order food from restaurants via its app.
In 2013, Andy Fang, Evan Moore, Stanley Tang, and Tony Xu founded Palo Alto Delivery, which became DoorDash Inc. in 2014. As of February 2019, the San Francisco-based food delivery app has reached 3,300 cities and 80 percent of Americans nationwide. It also plans to serve 100 Canadian cities this year.
While the company is not yet profitable, its valuation surged following multiple funding rounds over the past 12 months. In March 2018, DoorDash saw its valuation jump from US$1.4 billion to US$4 billion following a US$250 million Series E funding round, then to US$7.1 billion after a US$350 million Series F round, and to over US$12 billion with its Series G.
Its backers include Sequoia Capital, DST Global, SoftBank’s Vision Fund, Temasek Holdings, and Dragoneer Investment, among others. The latest funding round is led by New York City hedge fund Darsana Capital Partners, which takes its total funding amount raised since founding to US$2 billion, according to Crunchbase.
Tony Xu, co-founder and chief executive officer of DoorDash, told Forbes that the fresh capital will not be used towards price competition with its rivals, noting that he would rather focus on market expansion.
He also highlighted the company’s new service offering, DoorDash Drive, a white-label fulfillment platform that powers direct delivery for businesses.
Expanding beyond restaurant delivery and into grocery delivery for supermarkets and other businesses, DoorDash has been Walmart’s largest last-mile logistics partner for groceries in the United States since last year.
While Lyft and Uber saw declines in their post-IPO share prices, on-demand food delivery platforms are still hot targets for venture capitalists and tech giants. Last week, London-based Deliveroo announced a US$575 million funding round led by Amazon, which brought its total funding so far to over US$1.5 billion.
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