DoorDash Inc. is ready to ride the surge in demand for delivery and investor appetite for initial public offerings.
The leading food-delivery app maker priced its initial public offering at $102 a share late Tuesday. That’s considerably higher than the San Francisco company’s most recent expected target range of $90 to $95 a share, which DoorDash had already increased. With that price, DoorDash is expected to raise at least $3.36 billion at a valuation of $32.4 billion. Its stock is expected to begin trading Wednesday on the New York Stock Exchange under the ticker “DASH.”
The pandemic has been a boon to the seven-year-old company, which charges commissions to its restaurant partners and a fee to consumers who use its app to place orders. It now owns 50% of the U.S. prepared-food delivery market, according to Edison Trends. Uber Technologies Inc. UBER, -1.47%, which just completed its purchase of Postmates to complement its Uber Eats business, is No. 2 with 33% market share.
DoorDash’s year-over-year revenue growth for the first, second and third quarters of this year were 172%, 213% and 268%, respectively. For the third quarter ended Sept. 30, the company, which also does business in Canada and Australia, brought in $879 million in revenue.
Tom White, analyst with D.A. Davidson, said DoorDash is growing faster than its competitors.
“That was an established trend even before the pandemic,” White said. “The pandemic has just supercharged that dynamic.”
See: 5 things to know about DoorDash as it goes public
DoorDash will join other tech companies, such as Snowflake Inc. SNOW, +0.27%, Asana Inc. ASAN, -2.29% and Palantir Technologies Inc. PLTR, -1.21%, that have gone public this year amid pent-up demand for offerings after a momentary pause because of the COVID-19 pandemic. Airbnb Inc. ABNB, , Roblox RBLX, and Wish WISH, are also set to go public by the end of the year.
Since its 2013 founding, DoorDash had raised $2.5 billion founding from investors including SoftBank’s Vision Fund, Sequoia Capital and Kleiner Perkins.
The IPO will be led by Goldman Sachs and JPMorgan, two of 12 underwriters listed in the filing.
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