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Boxed CEO Chieh Huang talks about delivery apps that are straining local grocery stores and lowering prices for women’s items.
DoorDash is preparing to go public.
The third-party delivery service has filed for an initial public offering with the Securities and Exchange Commission, capitalizing on the boom in app-based delivery caused by people staying at home during the pandemic.
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The San Francisco-based company will list its shares on the New York Stock Exchange under the ticker symbol DASH.
Founded in 2013, DoorDash is a leading player in technology-driven delivery with over 18 million customers and 1 million “dashers” delivering food to its merchants. Its mission is to enable physical businesses to thrive “in an economy increasingly driven by convenience and rapidly changing consumer expectations,” according to its Form S-1 registration statement.
DoorDash CEO Tony Xu said he founded the company with the aim of helping small restaurants and local community workers “fight the underdog” and succeed even in troubling and changing times like today.
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“While small businesses are vital to our communities and created approximately two-thirds of net new jobs in the United States between 2000 and 2018, they are now at risk of being left behind in the convenience economy where consumers got used to getting it all in a few clicks. , a trend that has only accelerated in a COVID world, ”Xu said in a letter attached to the IPO prospectus.
As a Chinese immigrant, Xu created DoorDash to empower those like his mother, “who came here with a dream of making it on their own”.
Xu and co-founders Stanley Tang and Andrew Fang will all own a portion of the shares that 20 votes each, while ordinary shareholders will only hold one vote per share. Xu will own 41.6% of the Class B ordinary shares, with 14.9 million shares, before the offer. Andy Fang and Stanley Tang will also control a large amount of stock. Fang will own nearly 40% of the class B ordinary shares, with 13.5 million shares, and Tang will own 39% of the class B shares, with 13.4 million shares.
DoorDash’s operational playbook will depend on its logistics platform which can facilitate local deliveries, merchant services to increase sales in the modern era through customer acquisition, insights and analytics, payment processing and customer support, as well as its membership program, DashPass. DashPass is a membership program where customers can pay a flat monthly delivery fee of around $ 9.99 for unlimited deliveries primarily from restaurants.
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As the leading food delivery service in the United States, DoorDash’s revenue more than tripled in September compared to the previous year. Strong year-over-year revenues show the company’s growth, with a net profit of $ 23 million for the first three months of the pandemic at the end of June, although its growing expenses have harmed the company’s profitability. In addition to suffering a net loss every year since its founding, it has reported a net loss of $ 667 million in 2019 and $ 149 million in the first nine months of 2020.
DoorDash’s IPO is poised to compete with other major delivery services like UberEats, Postmates, Seamless, and GrubHub.
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While DoorDash is primarily a third-party food delivery service, it predicts that its services “will become a wallet for the physical world where a customer can not only access restaurants” but also local businesses in their community. which suggests an expansion of the convenience economy to all in the future.
It wouldn’t be the first time that a food delivery app has broken standards. Most recently, Postmates announced the launch of a new retail platform ahead of the holiday season, where customers can get instant delivery on everything from beauty and wellness products, to clothing and household items. Postmates have also partnered with Walgreens while Instacart has linked arms with 7-Eleven.
Before DoorDash went public, it announced a partnership with Sam’s Club to provide same-day deliveries on prescription drugs.
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The company’s announcement to go public comes after a big win for the odd-job economy and delivery businesses in California, where voters passed Prop 22, exempting delivery providers from having to reclassify their drivers as employees. The law is said to have made it more expensive to hire drivers with additional costs such as healthcare and sick days further hampering cash flow as DoorDash aims to become profitable.
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