DoorDash planned to go public earlier this year, filing confidentially with the Securities and Exchange Commission in late February. But the pandemic halted the I.P.O. market. DoorDash and other delivery companies instead focused on responding to a flood of demand from customers, as restaurants closed and people stayed home because of the pandemic.
In late summer, an ebullient stock market revived tech I.P.O.s, with companies like the data start-up Palantir and the data warehousing company Snowflake making their public debuts. Airbnb is expected to file its offering prospectus next week.
Even so, DoorDash faces challenges, such as its lack of profits. Other gig-economy companies, such as Uber and Lyft, have faced similar questions about whether they can become viable businesses.
DoorDash, however, is no longer quickly burning through cash. In the first nine months of the year, its business generated $315 million of cash; in the same period of 2019, it consumed $308 million of cash.
DoorDash faces labor questions because of its use of contractors. This month, the company notched a political win with the passage of Proposition 22, a California ballot measure that exempted it, Uber, Lyft and others from a law that would have required them to treat their drivers as employees.
The company is also dealing with steep competition and consolidation in food delivery, where customers, restaurants and drivers are not particularly loyal to one competing service over another. DoorDash’s prospectus named four major competitors and said its “fragmented and intensely competitive” market was a risk for investors.
In June, rival Grubhub agreed to sell itself to Just Eat Takeaway, a European service, for $7.3 billion. A month later, Uber acquired Postmates, a smaller competitor, for $2.65 billion. DoorDash had entertained deal talks with Postmates, Uber and Grubhub over the last year, but has remained independent.