DoorDash, the food delivery startup, is gearing up to raise about $500 million, giving the company a valuation of higher than $6 billion.
The Wall Street Journal, citing a person familiar with the situation, reported that at a $6 billion valuation DoorDash is valued at between four and five times its worth after a round of fundraising in 2018. Temasek Holdings Pte., the Singapore state investment firm, is expected to lead the capital raise. The paper noted that GIC Private, another Singapore state firm, has an investment in DoorDash. Other investors include CRV, Khosla Ventures, Kleiner Perkins and Sequoia Capital.
DoorDash is garnering a lot of attention from investors because it has been able to grow faster than its rivals in the U.S. during the first half of last year and has maintained a market share of close to 18 percent, reported the Wall Street Journal, citing Edison Trends Report. GrubHub is still the market leader, accounting for around 34 percent of the revenue derived from the U.S. online food delivery market. The potential investment comes as DoorDash has been expanding its services, getting into the grocery market via a partnership with Walmart. It also wants to deliver alcohol and retail packages, noted the paper, citing job postings at the company. It also inked a deal with General Motors to pursue self-driving car deliveries.
DoorDash’s potential capital raise is a stark contrast to other news emanating from the online delivery world on Tuesday (Feb. 12). Earlier Reuters reported Walmart and Deliv, the logistics startup, have served ties after piloting a partnership. Deliv was among the earliest delivery partners of Walmart, but according to a report, it ended the relationship via a 90-day termination notice. Walmart spokeswoman Molly Blakeman told Reuters the two sides mutually agreed to end the arrangement. “As with any pilot, the intent is to learn. And we ultimately came to the conclusion with Deliv that while their platform is a good delivery option, it was not the best fit for our program at this time,” she said.