As deals happen across the industry, the San Francisco-based company plans to sell hundreds of millions of dollars of equity to its backer T. Rowe Price Group Inc., Fidelity Investments and others, sources told the newspaper.
The size of the transaction has not been set, and there’s always a chance it could collapse.
Sources told the WSJ that another current investor, SoftBank Group Corp.’s Vision Fund, is considering taking part in the transaction.
Just last year, DoorDash’s market value was $13 billion, or nearly ten times what it was in 2018.
In February, PYMNTS reported DoorDash filed paperwork for an initial public offering (IPO) with the Securities and Exchange Commission. At the time, the company said it had hoped to be listed on the stock exchange in the spring. But the onset of the coronavirus pandemic has pushed the timeline to later this year.
The company became the top digital food delivery in 2019, edging out Grubhub, Uber Eats and Postmates Inc., the report said. It was responsible for one-third of food delivery sales in the U.S., according to data from Second Measure, the California-based analytics firm.
Still, the WSJ report noted neither DoorDash nor its rival, Postmates, has turned a profit. But sources said DoorDash expects to break even in the second quarter.
That breakthrough is a key factor when investors consider an IPO.
The nation’s shutdown amid the pandemic has caused Americans to rely on food delivery services, but the report said it has also stretched the finances of the industry’s players and caused them to seek deals to bolster them.
Earlier this week, PYMNTS reported Just Eat Takeaway.com agreed to buy Grubhub for $7.3 billion in a move that could result in the world’s largest online food delivery firm outside of China. Grubhub CEO and Founder Matt Maloney is expected to join Just Eat Takeaway.com’s board of directors. The new company will focus on popular sectors for food delivery, including the U.S., United Kingdom, Germany and the Netherlands.
Founded in 2013, DoorDash controlled nearly half of the U.S. market in April, according to Edison Trends.
It has raised more than $2.5 billion, offered discounts and entered new markets to overtake Grubhub, the Journal reported.