DoorDash Raises $250M, Turning Up The Heat On Food Delivery

Morning Report: Delivery unicorn DoorDash has raised an additional $250 million, heating the competitive on-demand food space even more.

Just months after picking up $535 million from SoftBank, food delivery company DoorDash has secured an additional $250 million in capital. The round was co-led by Coatue Management and DST Global.

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This is the known seventh fundraising event for the five-year-old company. The round brings DoorDash’s total funds raised to $971.8 million, according to Crunchbase. The company’s previous investors include Sequoia Capital, which led it’s $127 million Series C in March 2016, Kleiner Perkins, Khosla Ventures, and Y Combinator, among others.

The food delivery market is tight—DoorDash, valued at $4 billion (post-money), faces a host of competitors in the space, most notably Postmates and GrubHub. Postmates has raised $278 million, including $140 million at a $600 million post-money valuation. GrubHub, which hit the New York Stock Exchange in 2014, has a market cap of $11.1 billion. Other competitors like Caviar (acquired by Square for $90 million in 2014), and Uber Eats have also made moves in food delivery.

DoorDash isn’t just competing in meal delivery, however. The company announced a partnership with Walmart for its pilot grocery delivery platform in April of this year. In that effort, the company faces competition with Instacart, GoodEggs and Amazon.

DoorDash CEO Tony Xu said his company, which wasn’t actively fundraising, accepted fundraising bids to accelerate expansion, according to Axios. DoorDash says that it has expanded its partnerships and moved to more than 1,000 cities in the U.S. and Canada, aiming to double that by the end of this year.

In a high-cost industry like food delivery, deep pockets are a nearly-required war chest to support that kind of rapid expansion. And if a company plans to dominate that market, extra capital is always welcome.

Illustration Credit: Li Anne Dias