DoorDash Looks to Raise Up to $2.8 Billion in IPO

DoorDash, the biggest U.S. food delivery company, plans to sell 33 million shares for $75 to $85 each, raising up to $2.8 billion.
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Food-delivery giant DoorDash is looking to raise as much as $2.8 billion in an initial public offering, according to a regulatory filing.

The company said in a Monday filing with the Securities and Exchange Commission that it planned to sell 33 million shares for $75 to $85 each. 

The San Francisco company is targeting a valuation of $25 billion to $28 billion on a fully diluted basis, excluding the proceeds expected after the IPO, The Wall Street Journal reported.

DoorDash said more than 390,000 merchants run their businesses using its technology platform.

Since it was founded in 2013, DoorDash said, "merchants have generated over $19 billion in sales on our marketplace and in 2019 alone, merchants as a whole experienced 59% year-over-year same-store-sales growth on our marketplace."

DoorDash said in the filing that the coronavirus pandemic "has challenged all of our constituents."

"The pandemic has demonstrated how vital we are to the communities in which we operate," the company said.

In the near term, Shopify said it expected "to continue to make substantial investments to increase consumer adoption and extend our leadership." 

"We believe that our business will be successful and sustainable in the long term as our business model becomes more efficient, through increasing scale and continual operational improvements, and as our sales and marketing and promotions investments normalize," the filing said.

Among the risks it is facing, DoorDash cited its history of net losses, intense competition, and the possibility that its delivery people, whom it calls Dashers, might be reclassified as employees rather than contractors under federal or state law.

Earlier this month, DoorDash said an SEC filing that its Class A shares, which entitle investors to one vote each, will be listed on the New York Stock Exchange under the ticker symbol DASH.

DoorDash, which is backed by Japan's SoftBank Group, first filed its intention to go public in February.

DoorDash commanded around a near 50% share of the U.S. food delivery market in September, according to Second Measure research, well ahead of Uber Technologies'  (UBER) - Get Report Uber Eats (22%) and GrubHub  (GRUB) - Get Report (20%).