DoorDash raises $535M, now valued at $1.4B • Hacker News Board

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

#101

Post by aphextron » Thu, Mar 01, 2018, 8:50 PM UTC

lilyball wrote: post #91

aphextron wrote: post #78

Earlier quoted context omitted.

>One of the big players should launch a giant warehouse - serving as a giant kitchen. Capable of cooking all kinds of different varieties of cuisine and tons of automation. And a huge staff of well-trained chefs cooking, and delivering to a ~50 mile radius. They did, it was called SpoonRocket. I loved it, you could get a decent meal delivered in under 5 minutes. But they failed horribly because the economics just don…

I miss SpoonRocket. It was super convenient and they had some really good food.

Agreed. Their breakfast options were the best. I could wake up in the morning for work, put in an order, and have a full hot breakfast show up at my door by the time I get out of the shower.

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

#102

Post by spookthesunset » Thu, Mar 01, 2018, 8:54 PM UTC

jartelt wrote: post #51

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

Some reports put the post-money valuation after the Series C at $700M. For this round, the pre-money is reported to be $865M and post-money is $1.4B. If I had a 1% stake in DoorDash after the Series C, it was worth $7M ($700M * 1%). Assuming all the Series D round was new shares issued (we don't know the details), my stake in DoorDash would be diluted from 1% to 0.62% after the Series D (1% * $865M/$1.4B). However, t…

This is something a lot of the "all dilution is bad" commenters don't seem to understand. Dilution isn't automatically bad. What matters is the total dollar value of your stake in the company. Did it go up or down? What percentage of the pie you hold isn't really relevant.

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

#103

Post by contingencies » Thu, Mar 01, 2018, 9:20 PM UTC

In China where delivery of all kinds is omnipresent (the other day we even ordered someone to go shop for us and had the makings for breakfast arrive within half an hour!) it feels to me that people are beginning to see the limitations of prepared food delivery.

While it's always great to get some food when you're hungry, the waiting involved in a typical order is 45min+ and the experience never matches eat-in or self-made due to factors like post-cook cool-down while in transit, corresponding ingredient visual and textural degradation, timing unpredictability (what if I need to bury myself in work or have a conference call? I don't want someone at the doorbell suddenly interrupting), etc. Limited hours of availability also suck, as do random phone calls about parking/access/are-you-around/etc.

Some of these problems are impossible to completely solve as orders tend to be heavily grouped at peak periods, and driver and vehicle fleet size cannot be realistically optimized for short term burst demand patterns without substantially increasing costs.

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

#104

Post by eridius » Thu, Mar 01, 2018, 9:22 PM UTC

aphextron wrote: post #101

lilyball wrote: post #91

Earlier quoted context omitted.

I miss SpoonRocket. It was super convenient and they had some really good food.

Agreed. Their breakfast options were the best. I could wake up in the morning for work, put in an order, and have a full hot breakfast show up at my door by the time I get out of the shower.

What I really miss is the pulled pork mac 'n cheese. I don't want to know how many calories were in that thing, but it was delicious.

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

#105

Post by eric_h » Thu, Mar 01, 2018, 9:40 PM UTC

stctgion wrote: post #83

ben174 wrote: post #70

One of the big players should launch a giant warehouse - serving as a giant kitchen. Capable of cooking all kinds of different varieties of cuisine and tons of automation. And a huge staff of well-trained chefs cooking, and delivering to a ~50 mile radius. I'd imagine they'd open this in - say Fremont - and deliver to the entire bay area. It would be great, because I could order Mexican food for me, Indian food for t…

Deliveroo, the biggest player in the UK does this https://www.theguardian.com/business/2017/oct/28/deliveroo-d...

This may have been a byproduct of their acquisition of Maple.

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

#106

Post by natethinks » Thu, Mar 01, 2018, 9:43 PM UTC

I don't understand the appeal of DoorDash, I had an ad pop up for free delivery for a first time user and I happened to not have my car that day so I thought I would give it a go. "free" delivery only got rid of 1 of 3 service charges which had me spending $6 on top of a $9 dollar meal (not including tip). And that was "free" delivery for the first time I ever used the service.

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

#107

Post by ghaff » Thu, Mar 01, 2018, 9:49 PM UTC

wuliwong wrote: post #92

manifest23 wrote: post #89

Earlier quoted context omitted.

We actually just did something like this, but on a much smaller scale than "a giant warehouse". We've ( https://myaccio.com/ ) been running as a premium delivery service in Victoria, BC for a few years. Instead of taking a 25-30% discount from restaurants we were marking items up by 20%. We deliver mostly from the "good" restaurants who can't afford to take a 25-30% hit just to provide delivery. While this was turnin…

That's really cool. I hadn't considered that model before. Seems other's have, my gut tells me there's a successful business to be had just have to keep the financials inline.

There are probably a lot of businesses that work as premium small-scale businesses that explicitly are about convenience for people who don’t mind spending money on them. The problem with almost all of these VC-funded startups is they have to grow, grow, grow which means that they have to also appeal to people who count their pennies or at least dollars. And it’s hard to sell a luxury service without a surcharge.

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

#108

Post by hkmurakami » Thu, Mar 01, 2018, 10:08 PM UTC

spookthesunset wrote: post #102

jartelt wrote: post #51

Earlier quoted context omitted.

Some reports put the post-money valuation after the Series C at $700M. For this round, the pre-money is reported to be $865M and post-money is $1.4B. If I had a 1% stake in DoorDash after the Series C, it was worth $7M ($700M * 1%). Assuming all the Series D round was new shares issued (we don't know the details), my stake in DoorDash would be diluted from 1% to 0.62% after the Series D (1% * $865M/$1.4B). However, t…

This is something a lot of the "all dilution is bad" commenters don't seem to understand. Dilution isn't automatically bad. What matters is the total dollar value of your stake in the company. Did it go up or down? What percentage of the pie you hold isn't really relevant.

The main takeaway imo is that door dash did not have the metrics to command a favorable valuation. The funding terms inform us of the immediate prospects of the company.

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

#109

Post by ezconnect » Thu, Mar 01, 2018, 10:08 PM UTC

kels wrote: post #57

I really want to like all of these services. I've used Grubhub, Uber Eats and DoorDash. My problem with them is that it costs way more than eating at the restaurant. It's usually 30% - 40% of the cost of the food for delivery, service fees and tip. I've always wondered why it wasn't cheaper to do take out than eat at a restaurant. I'm not taking up a parking space, table, using facilities, or taking up as much of the…

Here in S.Korea you can order from a restaurant and they deliver it to your apt door. The food arrives on porcelain plates and bowls with utensils and trays just like you would get it from their restaurants. After an hour the delivery guy returns to your door to pickup the plates and utensils.

The price is the same as you would pay when you go inside their restaurants and you don't have to pay tip. They don't accept tips.

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

#110

Post by cocktailpeanuts » Thu, Mar 01, 2018, 10:17 PM UTC

This is a business that should be run by a company that can afford to lose money while subsidizing it by connecting the userbase to their other businesses, for example Amazon.

Basically they're sandwiched between both the vendors and the users who both want cheap price--users want cheap delivery, vendors don't want to pay a lot for delivery service.

Just look at the dilution based on this single raise, I'm guessing the founders are so diluted out at this point that there's not enough motivation to go on further unless there's a black swan type success to their business. I'm guessing the only reason they're raising this much is so they can work the same strategy of growing userbase with no viable plan and then selling to a larger company like Amazon or Google, or try to merge with companies like GrubHub.

Personally, I've only used doordash for their "free delivery" options, but stopped using them when I realized their "free" is not actually free, and they have hidden their cost into other parts of the price, which actually makes it much more expensive, not to mention it's unethical.