When Postmates confidentially filed for an IPO last week, we knew it was only a matter of time before rival DoorDash would try to shout louder with bigger news. In this case, nothing's confirmed, but DoorDash is looking at closing a round of funding that could push the company passed a $6 billion valuation.
— Erika Adams
The food delivery startup DoorDash Inc. is negotiating an approximately $500 million funding round led by Singapore’s state investment firm Temasek Holdings Pte, a person familiar with the matter said. Though the amount could differ because the details have not been finalized.
A deal would value DoorDash at $6 billion to $7 billion, said two people familiar with the details, both of whom asked not to be identified because the talks are private. The Wall Street Journal previously reported the deal terms.
DoorDash is increasingly looking like a direct rival to Uber Technologies Inc. as the ride-hailing company has turned its attention to food delivery with its fast-growing Uber Eats service. Uber is preparing for a public offering this year and is waiting to see whether another government shutdown interferes with its IPO preparations.
With so many large and well-funded players in the industry, the food delivery business has become increasingly competitive. Competition has hurt publicly traded GrubHub Inc.’s share price, which has dropped by about half from its peak last year. Meanwhile, Postmates Inc., another food delivery startup, announced that it had confidentially filed for a public offering.
While DoorDash’s business has been booming, the San Francisco-based company has faced scrutiny for how it pays its drivers. The company accounts for workers’ tips from customers when calculating how much it pays them.
A spokeswoman for DoorDash did not immediately respond to a request for comment. Temasek declined to comment on the deal.
©2019 Bloomberg L.P.
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