DoorDash Raises Another $400 Million Ahead Of Its Public Listing

The food delivery wars remain heated amid a coronavirus-induced boom in business. Last week, GrubHub agreed to be acquired by European company Just Eat Takeaway for $7.3 billion. On Thursday, DoorDash announced $400 million in fresh capital.

This latest fundraise elevates the San Francisco-based startup’s valuation to nearly $16 billion, according to a company press release. DoorDash, which has raised more than $2.4 billion in venture funding since its 2013 launch, confidentially filed to go public in February. But the rapid outbreak of Covid-19 in the United States—while increasing food delivery volumes—has stalled the IPO market. (DoorDash, which likely remains in a pre-IPO quiet period, declined to comment on the status of its IPO.)

The latest capital injection will go towards new products and services to address the changing commerce landscape made necessary by Covid-19, DoorDash said it its press release. The new funds may also further the startup’s quest to increase market share in the U.S., Canada and Australia, the three countries where it operates.

DoorDash overtook GrubHub last year to become the U.S. food delivery leader. The startup continued to expand its grasp on the market, reaching a 45% share in May, according to data from analytics firm Second Measure. Covid-19 has buoyed meal delivery sales—the same data shows that U.S. sales across all delivery platforms has roughly doubled since the start of the year.

Despite the Covid-19-related increase in food delivery, the question of profitability still casts a shadow across the industry, spurring a series of consolidations. These include last year’s DoorDash-Caviar merger and GrubHub’s acquisition by Just Eat Takeaway (itself a merger between two European delivery services) which followed rumors of a takeover from Uber. DoorDash may be in a more stable position ahead of its IPO—operations are expected to break even for the quarter ending June 30, according to a Wall Street Journal report last week which heralded Thursday’s funding round.

The news, first reported by Axios, marks DoorDash’s first venture capital investment of 2020 and follows $1 billion brought in across two rounds last year. New investors Durable Capital Partners and Fidelity led the round, which included with return backing from “existing investors, funds and accounts advised by T. Rowe Price Associates,” according to the release. The startup is a highlight in SoftBank’s Vision Fund portfolio, which has been under fire in recent months.