Food Delivery Service DoorDash preps for IPO

• DoorDash overtakes GrubHub to become the leader in food delivery services in 2019, confirmed with data analytics by firm Second Measure.
• DoorDash has announced Thursday it’s taken an initial step toward a initial public offering.
• DoorDash was valued at $13 billion in a recent funding round, Bloomberg recently reported in November.

DoorDash stated it has recently submitted it’s draft S-1 filing to the Securities and Exchange Commission (SEC). DoorDash has tapped Goldman Sachs as an underwriter for its IPO, according to a source familiar with the matter.

DoorDash has recently raised more than $700 million in its most recent Series G funding round, Bloomberg also reported in late November, valuing the food service delivery company around $13 billion. DoorDash has became the leader in food delivery in 2019, capturing a third of all food delivery sales in the U.S., according to data from analytics firm Second Measure. The firm found it overtook GrubHub, Uber Eats and Postmates.

Participating Restaurants from local eateries to world wide fast-food chains like food giant McDonald’s have also turned to delivery aggregators like DoorDash to find new customers, who are looking more convenient dining options. But high commission fees from DoorDash and its rivals have put pressure on restaurant profits. Restaurants have turned to local regulators for help. The New York City Council has also announced six bills on Thursday targeting delivery providers, including a 10% cap on commissions paid by restaurants.

DoorDash’s IPO disclosure also comes after the company explored a merger with rival Uber last year, according to a Financial Times report. SoftBank, which invested heavily in both companies through its Vision Fund, encouraged the merger discussions, the FT reported based on sources familiar with the matter who said they had not ruled out the possibility of resuming talks.

A successful IPO for DoorDash will mean an important win for SoftBank, which also backed off of heavy funding in the months since WeWork’s IPO fell apart as potential investors criticized its financials and it’s unusual corporate structure. The Vision Fund recently backed out of several start-up investments after the IPO flame-out, Axios reported in late January.

DoorDash’s recent confidential filing does not necessarily mean that its IPO will happen any time soon. Rival delivery service Postmates said last February it submitted a confidential draft S-1, but it still hasn’t made its public debut. Market conditions impacted by the coronavirus may force DoorDash to postpone its public offering. The Dow Jones Industrial Average, S&P 500 & Nasdaq Composite were all in correction territory Thursday morning. .