DoorDash

About

DoorDash is a food delivery and logistics platform founded in January 2013 by Stanford University students Tony Xu, Stanley Tang, Andy Fang, and Evan Moore ¹. The company originated as PaloAltoDelivery.com after Xu and Moore, while building an SMB feedback app, interviewed a macaroon store manager in Palo Alto who identified delivery and driver management as her greatest challenge ². After interviewing over 200 small business owners, the founders pivoted to delivery, doing the deliveries themselves at night while attending classes during the day ¹. The company incorporated as DoorDash in June 2013 ¹.

DoorDash went public on December 9, 2020, raising $3.37 billion by selling 33 million shares at $102 each ³. At IPO, the company was valued at $32.4 billion, which increased to $71.3 billion by the end of its first trading day ³. At the time of IPO, CEO Tony Xu owned 5.2% of DoorDash, while co-founders Andy Fang and Stanley Tang each owned 4.7% ³.

DoorDash is headquartered in San Francisco, California and operates in the United States, Canada, Australia, Japan, Germany, and other international markets ¹.

Funding History

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What Investors Say

Sequoia Capital’s Alfred Lin initially passed on DoorDash’s seed round, worried that the model “seemed to be predicated on college kids spending their parents’ money” ¹¹. However, he reversed course and led the $17.3 million Series A round, taking a board seat ¹¹. In his investment memo, Lin highlighted Tony Xu’s deep customer empathy, noting how Xu grew up washing dishes in restaurants where his mother worked and understood small-business owners’ struggles ¹¹.

John Doerr of Kleiner Perkins led DoorDash’s $40 million Series B round in March 2015, giving the company a $595 million valuation, and joined the board ⁶.

SoftBank Vision Fund invested a total of $680 million across DoorDash’s Series D, F, G, and H rounds ⁵. When SoftBank was deciding whether to invest, its representative convinced Masayoshi Son that food delivery would not be a winner-take-all market ¹¹.

Marc Andreessen noted that Xu “moonlighted as a driver for companies like Papa John’s to learn how those companies operated and recruited drivers,” highlighting the founder’s hands-on approach to understanding the industry ¹¹.

What Founders Say

Tony Xu on starting DoorDash: “Especially in the beginning, a company should feel like a project, not a grand vision” ¹².

On market validation, Xu focused on three essential questions: “Would customers be willing to pay $5 for this service? Would restaurants be willing to pay us a certain percentage? Would drivers be willing to work for this wage?” ¹²

On learning from failures: “We start every team discussion with highlights and lowlights — and the lowlights come first,” because “looking at what’s wrong is actually the easiest way to find the right answer” ¹².

On the founding vision: “For the four of us, when we were starting DoorDash, we always had the same vision, which was to build this last mile FedEx — or the ‘FedEx of locals’” ².

On personal growth: “If I were always right, I’d be worried I’m missing something or not taking enough risk” ¹².

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