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DoorDash expects to raise up to $2.81 billion in its initial public offering of 33 million shares.

DoorDash kicks off IPO

Last-mile delivery company expands presence in retail grocery sector

Just over two weeks after filing, last-mile food delivery provider DoorDash has launched an initial public offering.

San Francisco-based DoorDash said Monday that it’s offering 33 million shares of Class A common stock at an expected share price of $75 to $85, for a total IPO of $2.48 billion to $2.81 billion. The shares will trade on the New York Stock Exchange under the ticker symbol DASH.

DoorDash confidentially submitted a draft S-1 filing to the Securities and Exchange Commission in February and followed that up with an S-1 registration statement and prospectus filing on Nov. 13. The company’s last private valuation was $16 billion as of June, and through September it had raised funding of $2.5 billion. Goldman Sachs and J.P. Morgan are serving as lead book-running managers for the proposed IPO.

In August, DoorDash announced plans to expand its presence in the grocery delivery space with the launch of its DashPass subscription service, in which customers pay $9.99 per month for unlimited free deliveries for orders of at least $12. 

Previously, DoorDash — known primarily for restaurant food delivery — provided grocery retailers with last-mile delivery only through its white-label Drive service, in which retail partners collected, picked and packed the orders. Now DoorDash is bringing to the table an end-to-end online grocery marketplace solution, encompassing ordering, fulfillment and delivery. 

Initial grocery retail partners for the new service include Smart & Final, Meijer, Fresh Thyme Market, Hy-Vee and Gristedes/D’Agostino. According to Fuad Hannon, head of new verticals at DoorDash, the first phase of the rollout will give more than 75 million Americans access to online ordering and delivery from a grocery store via DoorDash.

Grocery retailers that have used the DoorDash Drive white-label fulfillment solution for last-mile delivery include Walmart, Hy-Vee, ShopRite, Coborn’s, Woodman’s Market, Kowalski’s Markets and independent grocers under the Piggly Wiggly banner. DoorDash also has provided meal delivery for such chains as Wegmans Food Markets, Hy-Vee, Gelson’s Markets, Kowalski’s, Big Y Foods, Food City, Village Super Market, Save Mart, Lucky/Lucky California and Coborn’s, among others.

Last month, DoorDash delved deeper into the pharmacy arena with a partnership to provide on-demand delivery of prescription drugs for Sam’s Club. Through the service, over 500 Sam’s Club pharmacies in 41 states will use DoorDash’s Drive white-label platform to provide same-day delivery of medications. The deal marked DoorDash’s first large-scale pharmacy delivery partnership. 

During the summer, DoorDash also launched delivery of food, groceries and other non-prescription products with drugstore giants CVS Pharmacy and Walgreens. And in April, DoorDash extended its reach in the retail sector with the launch of same-day delivery in the convenience store channel, including more than 1,800 stores of chains such as 7-Eleven, Circle K, Wawa and Casey’s.

Overall, DoorDash provides on-demand delivery and logistics services to local and national businesses in more than 4,000 cities and all 50 states across the United States, Canada and Australia. The company serves more than 18 million consumers and 390,000 merchants and fields over 1 million delivery personnel, known as Dashers. In its IPO prospectus, DoorDash reported a 50% U.S. market share in local food delivery logistics, compared with 26% for Uber Eats, 16% for Grubhub and 7% for Postmates, based on data from Edison Trends.

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