Dordash, the premier food distribution app in the US, filed its IPO prospectus with the Securities and Exchange Commission on Friday. The company will list its shares on the New York Stock Exchange under the symbol “DASH”.
DoorDash reported $ 1.9 billion in revenue for the nine months ended 30 September. This is more than $ 587 million during the same period last year. As its revenue grew, Dordash also limited its net loss to $ 149 million over the same nine-month period in 2020. In 2019, Dordash incurred a net loss of $ 533 million over a nine-month period.
The company said it has 1 million dashers (or delivery workers) and more than 18 million customers.
DoorDash will offer three classes of stock with separate voting shares. Class A common stock owners will vote one per share. Class B shares will come with 20 votes per share and Class C shares will have no voting rights.
Offering stock at times has become a common practice in Silicon Valley, especially when the chief executive is also a founder, as is Tony Ju of DoorDash. The prospectus states that Xu and two of his co-founders, Andy Fang and Stanley Tang, are expected to enter into a voting agreement, which directs Xu to “vote and direct the vote” held by his co-founders For “. .
“As a result of this, Mr. Xu will be able to determine or significantly influence any action, including the approval of our stockholders, the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and approval. Merger, consolidation, sale of all or sale of all of our assets, or other major corporate transactions, ”says Filing.
The company also wants to engage with competitors Grube and Uber on the public market. According to analytics firm Second Maser, Durbud has a US market share in September, compared to Uber’s 22% and GrubHub’s 20%, with 49% of food delivery sales in September.
CND reported on Thursday that DoorDash is one of the most awaited IPOs of 2020. However, the epidemic threw a wrench in the plans of many companies, with AirBnB, Roblox and Wish all expected to go public.
Dordash’s last private valuation was $ 16 billion and has raised $ 2.5 billion so far.
DoorDash will become the latest gig economy company to go public. The business model has raised questions about labor rights in recent years as gig companies often allow workers to take up tasks without a full-time employee.
California voters have recently backed a resolution endorsed by Dordash and other gig companies that would allow them to retain their employees as contractors despite California’s new labor law, which aims to replace it. That employee structure helps large companies such as Doorgash and Uber to avoid expenses such as unemployment insurance and pay on time, although the proposal did provide some additional protection for workers.
Following this victory, CEO Tony Xu indicated that Dorshad would spread similar proposals across the country.
The company said that a risk factor for its business was “its failure to attract and retain dashers in a cost-effective manner.”
“If we do not continue to provide dashers with flexibility on our platform, forcing income-generating opportunities, and other incentive programs that are comparable or better to our competitors, we will also be able to attract new dashers or create existing Using our platform may fail to maintain or enhance the dashers, ”says Filing. Companies advocating for the California proposal often argued that an employment-based model would reduce their ability to offer workers flexibility, although labor experts and government officials rejected that argument.
Dordash also stated clearly in the filing, “If the dashers are reclassified as employees under federal or state law, our business, financial condition and results of operations will be adversely affected.” The company says that reclassification will adversely affect the business because things like legal injunctions prohibit them from using existing business practices, claims for employee benefits and discrimination.
Dordash has also acknowledged in the filing that it has been the target of legal challenges due to its tipping model for dashers, and says the pay model may remain a risk. For example, the DC attorney general filed a lawsuit last year against DoorDash, claiming its former tipping model was “misleading” because it allegedly convinced users that their tips would go directly to workers, when instead Doormash guarantees minimum wage for workers. However, it has a new payment model that it said would result in greater compensation for dashers, with Dordash saying “this may in some cases lead to less stability in earnings during delivery.”
Food delivery has been a rare bright spot during the epidemic as consumers avoid restaurants and stay home at times under local restrictions to prevent the virus. For example, GrubHub’s stock has shot up over 49% to date, while the S&P 500 has gained nearly 9.5%.
Dordash warned, among its risk factors, that it may not be able to keep up with the pace seen during the epidemic.
“Circumstances that have accelerated the growth of our business due to the impact of the COVID-19 epidemic may not continue in the future, and we see a decline in growth in revenue, total orders, and marketplace GOVs in the future Let’s hope so. ” Company revealed
The company also warned that the ease and low cost of switching between food competition options could jeopardize its business in the future, despite its strong position in the US market.
DoorDash has twice made CNBC’s Describer 50 list, which identifies 50 innovative private companies in various sectors.
This story is developing. Check back for updates.
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