DoorDash and Airbnb Might See $30 Billion-Plus IPO Valuations

DoorDash is aiming for an initial valuation range of $29 billion to $33 billion, while Airbnb is reportedly looking for something fairly similar.
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U.S. food-delivery leader DoorDash is aiming for an IPO valuation well above the valuation it received during its last funding round, and Airbnb is reportedly doing the same.

In a revised IPO filing published on Monday morning, DoorDash set an initial IPO price range of $75 to $85. That spells a valuation range of $29 billion to $33 billion after accounting for outstanding stock options, warrants and restricted stock units (RSUs) -- well above the $16 billion valuation the company received in a June funding round.

Separately, Bloomberg reports that Airbnb is aiming for an IPO valuation range of $30 billion to $33 billion. For comparison, the alternative accommodations leader was valued at just $18 billion in an April funding round -- when fears about COVID’s impact were running especially high -- and at $31 billion in a 2017 funding round.

DoorDash plans to list under the symbol DASH, and is looking to raise $2.5 billion to $2.8 billion by selling 33 million shares. At the midpoint of its price range, the company would be valued at 14 times its trailing 12-month revenue ($2.21 billion).

Airbnb plans to list under the symbol ABNB. At the midpoint of the valuation range it’s reportedly seeking, Airbnb would be worth 7.6 times its trailing 12-month revenue ($4.17 billion) and 6.5 times its 2019 revenue ($4.81 billion), which of course was unaffected by COVID.

DoorDash, which obtains nearly all of its revenue from the U.S., has been registering blistering growth since March. Its revenue rose 268% annually in Q3 to $879 million, while its marketplace gross order value (GOV) rose 246% to $7.25 billion.

In addition, whereas rival Uber’s  (UBER) - Get Report food-delivery operations are still generating substantial losses, DoorDash posted just a $43 million Q3 GAAP net loss, and would have been slightly profitable if not for one-time general & administrative (G&A) expenses. Moreover, the company generated $229 million worth of free cash flow over the first nine months of 2020.

Business for Airbnb still remains well below pre-COVID levels, but declines aren’t nearly as bad as they were earlier in the year. After recording annual declines of 42%, 72% and 50%, respectively, in March, April and May, Airbnb’s “gross nights and experiences booked” were down less than 25% during the following four months, with a 23% decline reported for September, as reported in Airbnb’s IPO prospectus.

Likewise, after generating substantial losses in Q1 and Q2 amid major bookings declines and numerous cancellations, Airbnb generated a $418.7 million operating profit and a $219.3 million net profit in Q3. Rebounding demand and major layoffs both played roles.