SAN FRANCISCO (AP/CBS SF) -- DoorDash has priced its shares at $102 apiece heading into its stock market debut Wednesday, valuing the 7-year-old food delivery company at nearly $39 billion.
The price was higher than the company's most recent target price of $90 to $95 a share, reflecting investor enthusiasm for the initial public offering.
The San Francisco-based company raised $3.4 billion in its offering. Starting Wednesday morning, DoorDash will trade on the New York Stock Exchange under the symbol DASH.
DoorDash was founded in 2013, when CEO Tony Xu and some classmates at Stanford University set up a website and posted local menus. Customers have placed more than 900 million orders since then.
It now offers delivery from 390,000 merchants in the U.S., Canada and Australia. Powering that service are 1 million independent delivery drivers.
DoorDash was already growing before the pandemic thanks to customers' growing preference for dining at home. Its revenue more than tripled to $885 million between 2018 and 2019.
But lockdown orders and the closure of indoor dining have made DoorDash indispensable for many restaurants and diners this year. DoorDash reported revenue of $1.9 billion in the first nine months of 2020 alone.
DoorDash pulled ahead of its rivals by focusing on suburbs and smaller cities. It now controls 50% of the U.S. food delivery market. Its chief rival, Uber Eats, controls 26%, while GrubHub controls 16%.
Last month, DoorDash and other delivery companies scored a major victory in California with the passage of Proposition 22, which allows app-based delivery companies to treat drivers as contractors instead of employees.
Before that passed, they were facing a future where they would have to treat drivers as employees with access to costly benefits such as overtime and sick days. Ride-hailing and delivery companies won an exception, and instead they'll offer limited benefits such health care subsidies to drivers who clock 25 hours per week.
Back in August, San Francisco District Attorney Chesa Boudin asked San Francisco Superior Court to order DoorDash to immediately classify its workers as employees instead of independent contractors.
Despite its market dominance, DoorDash has yet to post an annual profit. It had a net loss of $667 million in 2019 and lost $149 million in the first nine months of 2020. The company did turn a profit of $23 million in the second quarter this year, but followed that with a $43 million loss in the third quarter.
In federal filings, DoorDash warned that its sales growth may not continue at the same pace once the pandemic subsides.
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