Prior to today, DoorDash had raised approximately $186 million according to Crunchbase. And then, in one fell swoop, the on-demand delivery company raised over three times that amount with its new $535 million Series D led by SoftBank, with Sequoia Capital, Wellcome Trust, and GIC participating.
It’s a goodly sum of money that SoftBank and followers have put into DoorDash, pushing the startup’s valuation firmly into unicorn status at $1.4 billion.
The on-demand delivery space is an incredibly competitive market for startups. DoorDash’s most immediate private competitor, Postmates, has raised $278 million over various rounds, most recently at a $600 million valuation.
For Postmates, the DoorDash news is likely unwelcome. It’s already well-known that on-demand delivery companies lose quite a bit of money in the pursuit of growth. Therefore, a large war chest of money, which SoftBank can and does provide, is welcome at DoorDash as delivery companies work out how to attain profit, but less so among its competitors.
DoorDash intends to use the money, according to ReCode, “to increase its corporate headcount by another 250 employees this year to about 800 and that it planned to expand from the 600 cities in which it currently operates to 1,600.”
But this isn’t the first deal SoftBank has made in similar companies. SoftBank recently took a stake of Uber, which also runs a DoorDash competitor called Uber Eats. ReCode noted that “SoftBank does not see a conflict between the two businesses…because they see the market as large enough for two dominant players.”
Of course, there is one already large player in the food delivery space. GrubHub, which has a market cap of $8.3 billion, last reported owning 34 percent of the on-demand food delivery market. It’s also worth noting that Amazon is looking into on-demand food delivery as well.
Therefore, it is far from guaranteed that DoorDash will come out ahead, even with SoftBank in its wallet. For now, the field remains just as competitive as ever.