The food delivery company DoorDash started trading on the New York stock exchange on Wednesday at a price that will value the largely profitless business at over $39bn.
The value of the company has soared during the coronavirus pandemic as people have turned to food delivery. DoorDash was privately valued at more than $15bn earlier this year, up from $1.4bn in 2018. It is the latest tech company to take advantage of stock market appetite for growth companies. Tomorrow AirBnB will join its ranks and could be valued at as much as $42bn.
While the pandemic has triggered a boom in Doordash’s business, the company still has a record of huge losses. In 2019, DoorDash had a net loss of $533m over the nine-month period. This year DoorDash reported a profit of $23m on $675m in revenue for the three months ending in June but lost $43m in the next quarter even as revenue jumped to $879m.
More than 1 million people now deliver food for the San Francisco-based company and workers, who are counted as “independent contractors”, have complained about pay, conditions and safety.
In its filing to go public, the leading food delivery service said that the Covid-19 pandemic had accelerated its business but warned that there were more losses ahead. “We expect our costs will increase over time and our losses to continue as we expect to invest significant additional funds towards growing our business and operating as a public company,” DoorDash said in its filing in November.
