While Airbnb put release of their IPO filing on hold, DoorDash decided to beat them to
the punch, as they dropped their filing on this Friday the 13th. Today, we take a first
look at the company’s s-1 filing as they take the next step in going public.
Welcome to Healthy, Wealthy, and Wise, the channel that has evolved to talk about all
the big, and not-so big companies going public. And today is one of the big ones, as we have
Doordash ending the speculation and finally releasing their IPO filing to the public.
But before we take our first look at what’s in the filing, I want to thank everyone in
the community for sticking with me over the past month or so that lacked any big name
companies going public. And for those of you new here, my name is Kevin and I want to welcome
you to the channel for the first time. While we were expecting Airbnb to be the first domino
to fall in a hot IPO market to round out the year, Doordash made the first move. If you’re
into IPOs and want to see more on Doordash and all the other ones coming out, this channel’s
for you…so consider this your formal invitation to join the community, and all you have to
do is press that little red subscribe button…it’s totally free and we’d love to have your
on board. I’ll check back with you at the end of the video to share more reasons to
subscribe, so hang in there till the end. For now, onto DoorDash’s IPO filing…so
let’s get into it! As you can see on the screen, this is the company’s S-1 filing.
Today, we’re going to talk about the highlights of what’s in the over 260 pages of it. Obviously,
most of us realize that Doordash has benefited from the pandemic, which explains why it makes
sense for them to go public now and this filing will share some of their data with us. The
question I have for you is, are you a true believer in DoorDash and all-in on investing
in the IPO or are you still on the fence and wanting to learn more? Let me know in the
comments, I always want to know you guys are thinking. But I know what a lot of want to
know, so before you ask, and I know some of you still will, we don’t have a date yet
as to when trading will begin, although I would expect in early December. And another
thing to know upfront is that we also don’t have the expected price range of the IPO,
but as those come out in future filings, I’ll update you guys, so definitely keep your notification
bell turned on so you don’t miss that information as soon as I have it.
So going back to the filing, here’s some of things that I would consider to be some
of the highlights. One of the first things you will want to know is what the ticker symbol
the company will trade under. And as stated in the filing, Doordash has applied to list
their stock on the New York Stock Exchange under the symbol “DASH”. Knowing that
will get you ready once we do get that trading date.
For some background on the company and some interesting statistics, obviously you know
that DoorDash has been focused primarily on delivery of food from restaurants, and they
do this through a digital platform that connects you to people who will deliver the food straight
to you. To give you an idea of how much the company has grown since first starting their
business in California back in 2013…as of September 30th of this year, DoorDash connects
over 390,000 merchants with over 18 million consumers, by way of over 1 million Dashers,
or what they call the independent contractors who deliver in all 50 states of the US including
Puerto Rico, as well as in Canada, and now in Australia through their digital platform,
completing over 900 million transactions. As evidenced by these numbers, the company
has become the largest and fastest growing business in the U.S. local food delivery logistics
category, with a 50% U.S. category share and a 58% category share in suburban markets.
As you can see on your screen, the company’s share of the market grew from the just 17%
in January of 2018 to get to that 50% that they’re at today. And this screen also gives
you an idea of who their primary competitors are, which many of you know, and those include
Grubhub and Uber Eats. As the category leader, U.S. consumers on
their platform represented less than six percent of the U.S. population as of September 30,
2020, and right now, Doordash believes they are still in the early phases of even a broader
market adoption. As for more stats, in 2019, the company reports
to having generated gross order value on the Marketplace of $8.0 billion. In the same period,
over $302 billion was spent off-premise at restaurants and other consumer foodservices
in the United States. So when considering future growth prospects, this represented
less than three percent of the off-premise spend, which Doordash sees as highlighting
the large addressable opportunity ahead of them in food delivery alone. And we say alone,
because they are also beginning to expand into other areas beyond food. As the CEO provides
guidance to the future, he states a vision to transform the way local merchants do business
and enrich the communities in which they operate. And to execute on this vision, they have 3
strategies they plan to implement. The first is using their on-demand platform to be used
to deliver any item, so, yes, that means not just food, even though they expect a lot of
continued growth just from food delivery itself. Their second strategy is to provide services
and solutions to merchants that will enable those merchants to solve challenges such as
customer acquisition, delivery, insights and analytics, merchandising, payment processing,
customer support, and to fulfill demand generated through their own channels.
And lastly Doordash wants to leverage the use of a membership program to make it easy
and affordable for consumers. Which obviously will result in brand loyalty as well. They
have already launched a membership program called DashPass, where customers can pay a
flat monthly delivery fee, which currently is $9.99, for unlimited deliveries from eligible
merchants. Right now, these deliveries come primarily from restaurants, but going forward,
the company envisions the membership program becoming a primary way for a consumer to access
not only restaurants, but all the local businesses in their community, and in doing so, will
receive benefits while shopping in-store, at home, or anywhere in between. They started
offering DashPass in 2018 and of this September, they have 5 million members of the program.
So that’s where the company sees itself heading into the future. But what we also
want to see from these IPO filings is where the company is at with their financial numbers.
So let’s get into what they’re reporting…but before I give you the numbers, I want to ask
you to please hit that like button if you’re enjoying the video; it helps me know that
this is the kind of videos you want more of. Plus it really helps the channel get more
exposure on YouTube and I’m really looking to continue to grow it with your help. So
I really appreciate you doing this for me. Okay, to the numbers. For all of 2019, Doordash
reported revenue of $885 million. But that grew big time through the nine months ended
September 30th of this year, when they generated revenue of $1.9 billion. Now that’s some
eye-catching growth. And then in the same periods of time their gross profit grew from
$335 million to $944 million. As far as their net gain or loss, the company had a net loss
of $667 million in 2019 which came substantially down to a loss of $149 million during the
first nine months of this year. And then for Adjusted EBITDA, that number grew from a negative
$475 million in 2019 to a positive $95 million, also in the nine months ended September 30th.
Okay, so what do you think about those numbers and their trending? I’m guessing that you’re
liking that. I mean, you have to absolutely love the strong growth. The caveat is how
much of that growth is from the pandemic economy and how much of it will be impacted when things
get back to normal? That’s a question I’ll try to answer in a future video, but for now,
let’s look to the past before the pandemic set in. So on your screen, let’s check out
the numbers for 2018 and 2019. There you can see, before the impact of the virus, the company’s
revenue grew three-fold from $291 million to $885 million. And within that revenue,
the growth in actual numbers of orders for DoorDash more than tripled from 83 million
orders in 2018 to 263 million in 2019. And that growth obviously was driven by the company
picking up market share as we talked about earlier, but also by more and more people
using these services in general. As far as future risks to the company beyond
a return to normal, one of the big ones relate to worker classification, and one that DoorDash
explicitly lists in the filing is how regulations determining if the Dasher is an employee or
as an independent contractor or gig worker could impact them in different states or jurisdictions.
The company got a huge bit of good news from the election in California when voters passed
Proposition 22 which allows Dashers to continue to be classified as independent contractors,
thus keeping the company from being responsible for all of the regulations and costly requirements
that having them labeled as employees would entail. Obviously this measure is limited
to California, but with a state with such a big economy and influence, this has to be
seen as a good sign for DoorDash. As to the reasons for going public, DoorDash
lists the principal purposes of this offering as to increase their capitalization and financial
flexibility, create a public market for their Class A common stock, and enable access to
the public equity markets for them and their stockholders. They intend to use the net proceeds
from the IPO for general corporate purposes, including working capital, operating expenses,
and capital expenditures. Additionally, they say they may use a portion of the net proceeds
to acquire or invest in businesses, products, services, or technologies. However, they do
state that they don’t have any agreements or commitments for any material acquisitions
or investments in place at this time. And as to dividends, as common for most fast
growing companies, no surprise here as they don’t plan to offer a dividend anytime soon,
instead putting their earnings back into the company for the purpose of continuing to grow
the business. So there are the highlights of the filing.
And that’s just from my first look. As I take a closer look at it and read through
more updated filings, I’ll let you know what I find. And as I continue to process
the information, I’ll start to take a deeper look at the company’s prospects and come
up with a more thorough analysis of the company that considers where the market is going and
come up with a share price that I think makes sense. So if you’re interested in going
along this journey with me, definitely stay tuned to the channel, because I’ll have
more on DoorDash to come. Today really was just taking that first look at the company
and getting an idea of what they’ve been able to do so far. Getting an idea of where
they’re going is what determines if investing in the company at a certain price makes sense.
If this sounds good to you and you’re on the fence about subscribing, I hope this video
won you over. Because once you subscribe, you’ll be sure not to miss videos on all
of the big upcoming IPOs, not just DoorDash, but Airbnb and Instacart. And I’ll also
make sure you hear about smaller companies that could someday turn out to be the next
big thing, and we do this by talking about all the companies coming out during our weekly
featured show, IPO This Week. And within each episode of IPO This Week, we also cover all
the upcoming lock up expirations and notable quiet periods ending that might give you the
opportunity to get into a company that might have been too pricey for you on that first
day of trading, but one you really like. And that’s not to mention the live streams that
we do when there is something big happening where we can talk about it together live in
real-time. So lots of thing you may enjoy being a part of the community.
Anyway, I hope you enjoyed the video and found it helpful, and if you did, please push that
like button and share with your friends and on any of your social media sites and forums
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you for watching…and until next time, have a great day!