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DoorDash Has Already Peaked
Its valuation doubled and then doubled again in an IPO bonanza. But is it just a well-timed flash in the pan?
In mid-2019, a private funding round valued DoorDash, the restaurant delivery service, at $12.7 billion. In early March 2020, with rumors that the company might go public, the New York Times noted Wall Street skepticism about that lofty figure, quoting one analyst who predicted DoorDash would take a “significant valuation haircut.”
Instead, the company IPOed this week at a valuation of $39 billion — or $102 per share — and promptly saw its stock skyrocket, ending its first day as a public company worth $71.6 billion. (Domino’s, which revolutionized online food delivery and, unlike DoorDash, turns a consistent profit, is worth about $15 billion.)
What happened on the road from $12.7 billion to $71.6 billion was, of course, the onset of Covid-19 — and accompanying shutdowns and consumer skittishness about dining out — which turned delivery companies like DoorDash into “pandemic winners.” DoorDash’s revenue has increased sharply over 2019 and even showed its first profit in the second quarter of this year.
