In less than six months, DoorDash Inc.’s valuation has nearly tripled, climbing to $4 billion.
Apparently the $535 million the on-demand food delivery service secured in March from SoftBank Group Corp., Sequoia Capital and Singapore’s GIC Pte sovereign-wealth fund wasn’t enough to satiate the startup’s appetite for cash. Today, the company announced that it had raised another $250 million from investment firms Coatue Management LLC and DST Global. The company’s valuation climbed from $1.4 billion.
There’s a reason that DoorDash needs the money now — even if Chief Executive Officer Tony Xu won’t mention his rival by name. Uber Technologies Inc. is pouring money into its own food delivery business. Startups with less capital, like Munchery and Sprig, have struggled, while Amazon.com Inc. and Instacart Inc. are fighting over the grocery delivery market.
On Wednesday, Uber revealed that it lost $891 million in three months as it invests aggressively in food delivery. Uber has $7.3 billion in cash on hand and has burned through more than $11 billion in its lifetime.
Compared with that, DoorDash is still small potatoes. The company has raised $978 million since it was founded in 2013. “It’s still the early days, when you think about why we do what we do,” Xu said. “There’s a long, long road ahead.”