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DoorDash, the $13B on-demand food delivery startup, says it has confidentially filed for an IPO

The on-demand food delivery wars continue to heat up in the US. Today DoorDash announced that it has filed confidentially to go public. The company noted that its Form S-1, a draft registration statement, was filed with the SEC and is now being reviewed. It did not say how many shares it would potentially sell, nor the price range for the IPO, nor what the timing of its next steps would be.

A public listing would be another way for the company to pick up a significant injection of capital at a key time in the on-demand delivery industry where competition is fierce and we’re seeing a lot of consolidation globally. The timing of the news also underscores just how cash-intensive this business can be. DoorDash — which by some estimates currently leads the food delivery market in the US — closed its latest round only in November last year, just over three months ago. That was for $700 million at a $13 billion valuation.

In the US — which alongside parts of Canada, is only country where DoorDash currently operates — the company is understood to have 33% of the market. It operates in heated, and subsequently expensive, rivalry with the likes of Postmates (10% share) and Uber Eats (20%), and more legacy players like Grubhub (32%). That fierce competition is very capital intensive and has led to rumors over the years that the company has explored mergers with Uber Eats, and with Postmates.

But DoorDash has also had its share of controversy, specifically around labour issues and how it interfaces with and pays its thousands-strong workforce of contractors. It also faced a data breach last year that affected nearly 5 million consumers, workers and merchants. It’s also been quietly building up its technology stack, with acquisitions like Scotty Labs to explore autonomous driving systems (to complement or potentially replace human delivery drivers).

Confidential IPO filings allow startups that are still in “growth” mode (and often unprofitable) to explore the early stages of setting themselves up for a public listing without the public scrutiny that comes with the process. Although it has been popularised by companies like Spotify and Slack — both of which went public — it doesn’t always lead to an IPO. Witness WeWork’s filing and subsequent u-turn after it disclosed more details about how the company worked. And Postmates, which filed for an IPO a year ago, has subsequently raised money and is said to be delaying any public moves.

More to come.

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