Retail

DoorDash Becomes Food Delivery Unicorn With $535M In Funding

DoorDash

After raising $535 million in a Series D round, DoorDash may be worth $1.4 billion in a post-money valuation. The company is not necessarily thinking about an initial public offering (IPO), though — even with that level of funding, TechCrunch reported.

“It doesn’t really change anything for us,” said DoorDash CEO Tony Xu. “Instead, we’re saying it adds more flexibility, giving us the optionality in terms of where we want to invest and how we want to think about financing for the company.”

SoftBank Group led the round along with participation from GIC, Wellcome Trust and Sequoia Capital. The deal also means several representatives from the investors are joining DoorDash’s board, such as Jeffrey Housenbold from SoftBank and Jeremy Kranz from GIC.

“DoorDash’s technology advantages, exceptional management team and relentless merchant focus are reflected in their stunning growth and impressive unit economics,” Housenbold said in an announcement. “Food delivery is just the first chapter. Tony and team have a bold vision to create the world’s best logistics company, and we’re thrilled to partner with them to help accelerate their progress.”

In a 2016 Series C funding round led by Sequoia Capital — which included Kleiner Perkins and Khosla Ventures — DoorDash raised $127 million to maintain its lead as more competitors try to beat it to new regions and cities around the world.

“This new round of capital will help us further our mission of connecting communities around the world through last-mile delivery,” Xu said in a blog post.

The Wall Street Journal explained then that the $127 million was a long time coming for DoorDash. Sequoia had originally submitted a valuation of $1 billion to investors, but a contrarian movement that pushed back against a unicorn-esque valuation saw the investment group eventually drop that figure to $700 million. This was still an accomplishment, according to Xu, indicating the delivery service is “growing fast, while building a scalable business that is built to last.”

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