Doordash delivers 86% gain in stock market debut

Doordash shares soared in its initial public offering Wednesday, capping a year of explosive growth for the food delivery company.

What’s not yet clear is whether Doordash can keep the momentum going even if delivery demand eases in a post-pandemic world.

The San Francisco-based company raised $3.4 billion in the offering, making it the largest IPO so far this year, according to Renaissance Capital, which tracks IPOS. Shares jumped 85.8% to close at $189.51 after Doordash priced them at $102 each late Tuesday. The closing price valued the company, which is trading under the symbol DASH, at around $72 billion.

Doordash’s IPO came one day ahead of another San Francisco startup, Airbnb, which planned to begin trading Thursday on the Nasdaq stock exchange.

Doordash was born in 2013, when CEO Tony Xu and some classmates at Stanford University set up a website and posted local menus. After a few hours, they got their first order: pad thai with prawns and a side of spring rolls.

Customers have placed more than 900 million orders since then. Doordash now offers delivery from 390,000 merchants in the U.S., Canada and Australia. Powering that service are 1 million delivery drivers, who are independent and not considered Doordash employees.

Doordash was already growing before the pandemic thanks to customers’ growing preference for dining at home. Between 2018 and 2019, its revenue more than tripled to $885 million.

But lockdown orders and the closure of indoor dining have made Doordash indispensable for many restaurants and diners this year. Doordash reported revenue of $1.9 billion in the first nine months of 2020 alone.

Christopher Payne, DoorDash’s chief operating officer, said customers’ expectations of convenience and quick delivery only accelerated during the pandemic. The funding from the IPO will let Doordash expand into areas like delivery from groceries and convenience stores, he said.

“Ultimately, a lot of these trends will stay,” he said. “Doordash is a platform that’s enabling the small, local merchant to play in this space, bringing the product in minutes, not days.”