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DoorDash raises $535M, now valued at $1.4B

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Re: DoorDash raises $535M, now valued at $1.4B

#21

Post by wskinner »

amitutk wrote: post #17
Gasparila wrote: post #2

Wow that's a lot of dilution for a late stage round. I feel bad for the employees that suddenly have their equity cut by 60%. If I'm doing my math right, ($865 MM pre-money) then it means even with the higher valuation preferred price goes down

Most likely earlier share holders sold their stakes, so not much dilution. Perhaps founders took money off the table too. In these cases, there is not much dilution because new shares are not issued (but not much capitalization either).

It's hard to infer much from this article since it lacks all relevant detail. If the earlier share holders are selling common stock, it's not clear how that affects the preferred price.

Re: DoorDash raises $535M, now valued at $1.4B

#23

Post by pavanred »

concernedctzn wrote: post #22

I won't use them after I tried one of their 'free delivery' codes and then the next time I went to place the same order it came out to the exact same price with delivery included, they seemed to have increased the price of the food to cover it the previous time.

The problem I have with doordash is that though they say the delivery fee is $x, there are a lot of hidden charges. You are actually paying a lot more than that, a markup on food items + a delivery fee + 8% service fee + taxes + 15% tip (optional but selected by default) + a small order fee (if your order is less than a predefined min order value)

For instance, there's a a particular dish served at a local restaurant that I like, and I recently noticed that it is $11.99 at the restaurant but in doordash it's priced $13.99, delivery fee of $4.99, service fees of $1.88 and optional but pre-selected tip of $3.81. And, of course taxes in addition to this. At this point in some cases, its perhaps more economical to take an uber/lyft to the restaurant and back.

Re: DoorDash raises $535M, now valued at $1.4B

#24

Post by mooreds »

My guess is they're raising to follow the path of deliveroo: https://techcrunch.com/2017/09/24/deliveroo-raises-385m/ which is opening kitchens to allow restaurants to increase production (and, who knows, maybe create a few brands of their own).

Ah, middlemen. There's always a peril in letting someone else own your customer.

Re: DoorDash raises $535M, now valued at $1.4B

#25

Post by traviswingo »

Unfortunately I no longer use DoorDash. The concept was amazing, but I’ve had one too many questionable people deliver my food that the last time it happened I didn’t even eat it.

I’m a huge fan of the “1 million jobs” type of companies like this, but there’s a level of trust that comes with allowing someone to handle the food you eat. I’m not even a judgemental individual, and I hate people that are, but I shouldn’t feel uncomfortable about my food delivery. I now go get my own food. Oh well.

Re: DoorDash raises $535M, now valued at $1.4B

#26

Post by afterburner »

pavanred wrote: post #23
concernedctzn wrote: post #22

I won't use them after I tried one of their 'free delivery' codes and then the next time I went to place the same order it came out to the exact same price with delivery included, they seemed to have increased the price of the food to cover it the previous time.

The problem I have with doordash is that though they say the delivery fee is $x, there are a lot of hidden charges. You are actually paying a lot more than that, a markup on food items + a delivery fee + 8% service fee + taxes + 15% tip (optional but selected by default) + a small order fee (if your order is less than a predefined min order value) For instance, there's a a particular dish served at a local restaurant…

Agreed, their fees are annoying. The website also always glitches for me the first time I press the final order button. It looks nice but it's making me look at other similar companies more these days. I enjoyed the early days with no fees and no glitches.

Re: DoorDash raises $535M, now valued at $1.4B

#27

Post by tyingq »

Doordash is a tire fire. 10x worse than Uber Eats for basic service. My experience is less than 50% success at delivering what I ordered. Missing items, wrong items, wrong totals, completely failed deliveries, and non-equitable compensation. Then, shit follow up when they fail. I’ll savor in more than a little Shadenfreud when they fold.

Re: DoorDash raises $535M, now valued at $1.4B

#28

Post by apendleton »

thesimon wrote: post #16
Mitchhhs wrote: post #3

"Xu said the company became “contribution margin positive” in the last year, which means that it’s profitable on a per-order basis. In fact, DoorDash has become profitable in its earliest markets." Its funny this is a milestone for a company at this stage. Congrats you aren't losing money on every order!

>> became “contribution margin positive” in the last year, which means that it’s profitable on a per-order basis. >Congrats you aren't losing money on every order! Seems like an overstatement as fixed costs are still not covered when they are "contribution marigin positve".

Definitely. At least, though, it means there's a path to profitability just by increasing volume, right? Like, if every new order brings it more than it marginally costs, with enough eventually you'd cover your fixed costs, so it seems like at least a rough validation of the business model (assuming their total addressable market is as big as they think it is). Vs, say, Uber, which is as far as I know still losing money on every ride and has no path out aside from not at all certain, majorly disruptive technical innovation.

Re: DoorDash raises $535M, now valued at $1.4B

#29

Post by cgb223 »

wskinner wrote: post #20
Gasparila wrote: post #2

Wow that's a lot of dilution for a late stage round. I feel bad for the employees that suddenly have their equity cut by 60%. If I'm doing my math right, ($865 MM pre-money) then it means even with the higher valuation preferred price goes down

Correct me if I'm wrong, but couldn't the preferred price stay flat, even with dilution? The company issues new shares and sells them at e.g. the current preferred price. Now there are more outstanding shares, and a higher post-money valuation, but a close to flat pre-money valuation. In this case the preferred price in real percentage of the company terms is higher since there are now more shares outstanding, but th…

Is there like a good blog post out there that can explain the difference between preferred and common stock, dilution, and all the other nuanced things about equity?

Re: DoorDash raises $535M, now valued at $1.4B

#30

Post by thisisit »

I haven't used DoorDash but my experience with food delivery services has been average. As a bachelor I loved them until I found out these companies use multiple ways to add up charges. Most of the time restaurant cost in-shop vs cost app varies a lot. Then they charge some kind of "packing charges". Including delivery fee some times the delivery price is 25% more than restaurant prices.

When I talked to some of the restaurants, they said these guys can take up to 30% of the food cost. It means DoorDash et al, can take up to 50% of an order.

So, I find it surprising that these guys still struggle to become profitable.

I also think that this whole phenomena might actually end up pushing restaurant prices up to the detriment of consumers.

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