The company is also launching a grocery delivery service.
DoorDash is preparing to take the plunge into the stock market with an initial public offering (IPO) during the fourth quarter of 2020, according to inside sources. It will join several other major publicly traded food delivery companies in space, including Grubhub (NYSE:GRUB) and Uber Technologies‘ (NYSE:UBER) Uber Eats. The IPO is likely to occur in November or December, sources told Bloomberg News.
Other major companies in the highly competitive arena continue to struggle with the issue of more orders leading to losses rather than gains, as expenses mount above fees. Grubhub posted a loss from record-breaking food deliveries during the second quarter of 2020, while Uber Eats also posted a loss even though its delivery segment generated a 122% year-over-year rise in gross bookings, climbing to $7 billion, and its number of monthly average platform customers soared 71%.
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Although DoorDash is subject to the same market conditions and potentially unsustainable long-term business model, it has several strengths as it moves toward its IPO. It enjoys a commanding 46% food delivery market share, according to research by Toast. It also secured $400 million in funding during June, bringing total investments to a whopping $1.6 billion.
Additionally, the company announced several days ago it’s rolling out an on-demand grocery delivery channel for those who want to stock their kitchens from home. The delivery service brings groceries to the customer’s doorstep “in under an hour” according to Smart & Final’s director of digital commerce, Navin Cotton. The new service offers coverage for approximately 75 million Americans and works with a number of different grocers.
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