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US Food Delivery Firm Raises $3.4 Bln In U.S. Listing And Doubles Valuation


12/09/2020


US Food Delivery Firm Raises $3.4 Bln In U.S. Listing And Doubles Valuation
The United States based food delivery firm DoorDash Inc managed to raise $3.37 billion through the sale of its shares in its initial public offering at $102 apiece which was higher than the upwardly revised target range that was announced by the company, the company said on Tuesday. This IPO mega sale also identified as one of the largest debuts in the US stock market for the current year 2020.
 
The great debut of the company at the stock market gave this food delivery startup a fully diluted valuation of about $38 billion which was more than double of the $16 billion valuation that the company achieved during a private fundraising round organized for its in June this year.
 
The largest third party food delivery partner for restaurants in the US market, DoorDash had initially set a target of selling 33 million shares a price range of between $90 and $95 a share. The firm had previously announced a target of selling its shares at tits IPO in a range of between $75 and $85 a share.
 
This very good UPO performance of the company comes at a time when the company as well as its competitors Uber Eats , Grubhub Inc and Postmates Inc have seen a sudden and steep rise in demand for their services of delivering food to consumers at home as they were forced to mostly stay back at their homes because of the novel coronavirus pandemic.
 
With this spectacular debut at the US stock market, DoorDash is now at par with its other big peer of the Silicon Valley that includes Palantir Technologies Inc and Snowflake Inc, which have had blockbuster IPOs as they benefitted from a strong rally at the stock market during the second half of the year as the market was spurred by stimulus money offered by governments and the increasing hopes of emergence of multiple vaccines for Covid-19.
 
The revenue of the company for the third quarter ended September was at $879 million which was much higher than the $239 million revenues generated by the company in the same period a year ago, DoorDash said. After reporting first quarterly profit of $23 million in the second quarter, the company posted a loss of $43 million during the latest competed quarter.
 
The Vision Fund managed by Japanese tech giant SoftBank Group Corp, venture capital firm Sequoia Capital and sovereign wealth fund Government of Singapore Investment Corp are financers and supporters of DoorDash which was formed in 2013.
 
The shares of the company started trading on the New York Stock Exchange on Wednesday under the ticker “DASH”. The lead underwriters for DoorDash’s offering were Goldman Sachs and J.P. Morgan.
 
(Source:www.financialpost.com)