SoftBank–backed food delivery startup DoorDash said on Thursday it had confidentially filed for an initial public offering with the U.S. Securities and Exchange Commission.
DoorDash competes with Uber Technologies Inc’s Uber Eats, GrubHub Inc and Postmates Inc and is currently valued at nearly $13 billion based on its last funding round in 2019 and also according to startup data platform PitchBook.
Loss-making DoorDash did not specify when exactly it plans to go public, but its debut will test the appetite of investors, who have been unforgiving in recent months towards debuts of private startups that have racked up massive losses.
Earlier in February, mattress retailer Casper Sleep sold shares in its IPO at the bottom end of a targeted range it had already lowered, slashing its valuation by more than half in less than a year.
Last year, office-sharing startup WeWork was forced to scrap its high-profile debut, after investors raised concerns over its ballooning losses and leadership under founder Adam Neumann.
Moreover, the fallout from the coronavirus outbreak has already weighed on the timing of listings this year and raised doubts over whether this year’s most high-profile debut – that of Airbnb – will go through this year.
While the Internet food-delivery business has witnessed rapid growth over the past decade, none of the top food-tech “unicorns” are yet to turn profitable in what is largely a low-margin business.
“The bigger issue is that DoorDash and the other food delivery services have been struggling to make money”, said Jay Ritter, an IPO expert and professor at the University of Florida.
DoorDash counts SoftBank Vision Fund, DST Global, Temasek Capital and Sequoia Capital among its top investors.
In 2019, the company raised $600 million from its existing and new investors Darsana Capital Partners and Sands Capital.