Morning Markets: DoorDash may pick up more cash as the company’s growth draws fans, worry.
Despite a series of setbacks amongst other Vision Fund-backed bets, one particular wager is chugging along as if the market was unchanged from earlier in the year. DoorDash, a richly-backed food delivery startup may raise $100 million more from T. Rowe Price at a valuation that Bloomberg describes as “nearly $13 billion.”
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That number makes sense as the company’s last round, a $600 million Series G from Temasek, the Vision Fund, Sequoia, and others, valued the company at $12 billion before the investment and $12.6 billion after. If the $100 million values the firm at around $13 billion, we can safely presume that DoorDash is worth about the same per-share as it was before; DoorDash is likely selling more equity at around the same price as its May Series G.
DoorDash has proven to be a fundraising juggernaut in recent years. From a $40 million Series B in 2015, DoorDash raised a $127 million Series C in 2016, a $535 million Series D in 2018 along with a $250 million Series E that same year. Our current annum brought more investment, with DoorDash picking up a $400 million Series F in 2019 along with the previously-mentioned $600 million Series G.
If the new, $100 million investment gets named, it will be a Series H. It may be considered an extension of the company’s Series G.
The round affirms that another investing group is willing to pay DoorDash’s prior valuation, good news for SoftBank, who has put lots of capital into the company since its Series D. But DoorDash’s continued funding success comes at an interesting time.
In the wake of WeWork’s implosion, there has been a sentiment shift (more here) of sorts away from quick growth powered by large deficits to perhaps slower growth but coupled to a quicker path to profitability.
Valuations have also been questioned, as companies that have been anointed as unicorns with high valuations while private have struggled to perform to that same level as public companies. It could be a smart move by DoorDash to stay valued at the same amount it was at before. Should the company go public, it would be easier to maintain the valuation it had while it was private if that valuation isn’t astronomically high.
Investors seem to like DoorDash (otherwise they wouldn’t be giving it so much money), but DoorDash is in a crowded space. There are multiple high-profile, well-funded food delivery startups out there. Refraining from boosting DoorDash’s valuation is probably wise.
Illustration: Dom Guzman