IPO caps year of growth - but still no profit - for DoorDash

DoorDash is capping a year of explosive growth with an initial public offering of its stock, hoping to keep the momentum going even if demand for food delivery eases in a post-pandemic world.

The San Francisco-based company raised $3.4 billion in its Wednesday offering. Late Tuesday, it priced its shares at $102 each, valuing the company at nearly $39 billion. DoorDash will trade on the New York Stock Exchange under the symbol DASH.

DoorDash was born in 2013, when CEO Tony Xu and some classmates at Stanford University set up a website and posted local menus. After a few hours, they got their first order: pad thai with prawns and a side of spring rolls.

Customers have placed more than 900 million orders since then. DoorDash now offers delivery from 390,000 merchants in the U.S., Canada and Australia. Powering that service are 1 million delivery drivers, who are independent and not considered DoorDash employees.

DoorDash was already growing before the pandemic thanks to customers’ growing preference for dining at home. Between 2018 and 2019, its revenue more than tripled to $885 million.

But lockdown orders and the closure of indoor dining have made DoorDash indispensable for many restaurants and diners this year. DoorDash reported revenue of $1.9 billion in the first nine months of 2020 alone.

The company's growth hasn’t come without headaches. DoorDash has lost money in every year since its founding, citing the cost of developing its platform and expanding into new markets. Last year, it spent $410 million to acquire Caviar, an upscale rival.

DoorDash had a net loss of $667 million in 2019 and lost $149 million in the first nine months of 2020. The company did turn a profit of $23 million in the second quarter this year, but followed that with a $43 million loss...