Illustration: Aïda Amer/Axios
DoorDash has raised $400 million in new equity funding at a $16 billion post-money valuation, Axios has learned.
Why it matters: For all the talk of deals that didn't happen because of coronavirus, this one is a product of the pandemic.
- Durable Capital Partners led, and was joined by Fidelity and return backer T. Rowe Price.
Flashback: On Feb. 27, DoorDash secured $340 million in debt funding and filed confidential IPO paperwork. There were no plans to raise additional private equity.
- Overall, DoorDash had raised around $2 billion from VCs (not including the debt). Its final infusion seemed to be last November, when it snared $700 million at a $13 billion post-money valuation.
Fast forward: The pandemic changed the meal delivery giant's plans. For starters, delivery volume soared due to the lockdowns. DoorDash also had new expenses, such as personal protective equipment for drivers and what it says was around $120 million worth of comped services to help beleaguered restaurant partners.
- There also were concerns about market volatility, although most IPO issuers have sailed through smoothly. Plus the prospect of strengthened competition via an Uber/Grubhub merger that ultimately became a Just Eat/Grubhub merger.
- The Wall Street Journal previewed this deal last week, noting that the company expects operations to break even for the quarter ending June 30 (excluding one-time expenses).
- DoorDash declined to make an executive available for comment, likely because of the still-active IPO registration.
The bottom line: Gig economy companies are under all sorts of PR pressures right now, including from politicians and partners, but none of it seems to be fazing investors.