DoorDash is set to go public with its shares in its Initial Public Offering (IPO) and anonymous sources have stated that the top food delivery company will offer each share for $102. The price is slightly higher than the expected price for DoorDash which was expected to trade at about $95 per share. The company will confirm the price of the shares late in the day on Tuesday and on Wednesday when the shares go public. The shares will be traded under the name “DASH” on the New York Stock Exchange.
The IPO will raise approximately $3.4 billion for the San Francisco company which has now been valued to be worth $39 billion. The year has been a very successful one for DoorDash which private market investors last valued at $16 billion.
DoorDash is not the only company that will be going public as the year comes to an end. Airbnb, an online property marketplace will be going public on Thursday. E-Commerce store Wish, and Affirm, a financial technology company, are also expected to start trading this month. The startup companies are taking advantage of the low-interest rates and rapid growth of tech firms as spurred by the COVID-19 pandemic. The year has had the most IPOs since 1999.
According to reports, Airbnb, which is expected to state its price per share on Wednesday, has also increased its initial price banking on signs that the IPO will attract many investors. Many of the tech companies have recorded high successes in 2020, due to the pandemic, but not many have had the success rate of DoorDash during the year. During this year’s third quarter, the company recorded total revenue of $879 million, up about 268% from the same period in 2019, CNBC reports.
In the second quarter of the year, DoorDash’s revenue grew about 214% with the company raking in $16.5 billion in orders in the first nine months of 2020. In 2019, the orders recorded by DoorDash had been about 5.5 billion for the same period. The company would be using a “hybrid auction” system to prevent a sudden increase in price during its first day of trading.
The COVID-19 pandemic has crippled several sectors but it has been of great advantage to tech companies. With people having to stay home, they opted for delivery services to get essentials. DoorDash is one of the companies that benefited from the pandemic with total revenue of $1.92 billion in the first three quarters of 2020, up by almost triple its first three-quarters revenue of $587 million in 2019.
The company currently has over 390,000 merchants including popular franchises such as McDonald’s and Chick-Fil-A. With an estimate of over 18 million patrons and 1 million drivers, the company is rated as the biggest food delivery company in America, with big competitors including UberEats and GrubHub. Currently, DoorDash also delivers groceries, convenience store commodities, and pet food.
The company’s boom might be however short-lived if people go back to eating out as soon as the pandemic begins to ease.