DoorDash Valued at $4 Billion After Adding $250M in New Funding
DoorDash has upped its valuation to $4 billion with a new $250 million financing round, five months after it raised $535 million to gain its “unicorn” status.
The new $250 million funding round was co-led by Coatue Management and DST Global. CEO Tony Xu told Axios’s Dan Primack that the company hadn’t been actively seeking new financing. Instead, the San Francisco-based company is characterizing the new money as a growth round—DoorDash said it has had 250 percent year-over-year growth and expects to operate in more than 2,000 cities this year, up from 1,000 in January.
It’s been an active year for the delivery service market, which DoorDash calls “last-mile logistics.” Retailers have been fighting for control of the same-day delivery sector. From Target (NYSE: TGT) and Walmart (NYSE: WMT) to Amazon (NASDAQ: AMZN) and Google (NASDAQ: GOOGL), the race to acquire delivery businesses and grab a section of the market has been raging since last year.
In Texas, grocery chain H-E-B joined in by acquiring Austin-based delivery service Favor for an undisclosed amount in February. Meanwhile, Chicago-based Grubhub (NYSE: GRUB) augmented its delivery service by agreeing in June to acquire Boston-based LevelUp for its mobile payments processing, customer loyalty programs, and data analytics tools. Grubhub remains the giant of the delivery sector, with an $11.3 billion market capitalization and stock that closed Thursday at $128.55 per share. But DoorDash and its $4 billion unicorn valuation—a standing earned when a private company is valued at more than $1 billion—appears to be catching up.
The company’s previous round was led by Chinese business conglomerate SoftBank Group, with participation from existing investors Sequoia Capital, GIC, and Wellcome Trust.