On-Demand Delivery Firm DoorDash Grabs $40M

The on-demand economy is getting bigger every day with big players – like Amazon and Google – squaring off against startups trying to be the next Uber.

DoorDash, an on-demand delivery service with 65 full time employees (and many, many more contractors who do the delivering) has just picked up $40 million in its latest funding round led by embattled venture capital firm Kleiner Perkins. Kleiner joins Sequoia Capital, Khosla Ventures and Charles River Ventures.

The small firm serves eight American cities and currently is limited to delivering takeout from restaurants – though CEO Tony Xu is looking to a more expansive future where DoorDash has doubled the markets it serves (by the end of this year) and is bringing more to the door than just food.

DoorDash does not release its user numbers, though Xu confirms that their service is large and growing in the markets where it is offered. DoorDash – despite competing in a very crowded field – is generally known as having distinguished itself by its “smarts.” They are the firm that most successfully considers extrinsic factors that can make delivery services unreliable – how long food takes to cook, how many drivers to keep on with irregular order flows, which “dashers” are best positioned to make each delivery – and managing them such that the service is highly reliable.

The technology in this company was enormously appealing,” said Kleiner Perkins’ John Doerr in a phone interview with Re/code about the deal. “Just the number of Stanford machine-learning experts they could hire — machine-learning people go crazy for this problem. It’s way more complicated than people realize.”

And in that complexity is an opportunity for profit, according to Doerr. In the U.S., the space is already worth around $70 billion.

“I think the opportunity is to be the logistics platform for last-mile delivery,” he noted.