(Photo: Nation Restaurant News)

DoorDash boosts IPO fundraising target to US$3.1 billion

(Photo: Nation Restaurant News)

DoorDash Inc said it’s seeking to raise as much as US$3.1 billion in its initial public offering (IPO) next month after a surge in investor demand let the biggest US food delivery company boost the price range for its shares.

The San Francisco-based company is marketing 33 million shares at US$90 to US$95 apiece, it said in a filing on Friday. DoorDash was initially targeting as much as US$2.8 billion, with a price range of US$75 to US$85 per share.

(Photo: Money Inc)

At that price, DoorDash’s IPO would be one of the largest US tech listings this year. The company is part of a cadre of consumer-oriented, web-based businesses that have lined up IPOs for December. The group also includes home-rental platform Airbnb Inc; video-game company Roblox Corp; instalment loans provider Affirm Holdings Inc; and ContextLogic Inc, the parent of online discount retailer Wish Inc.

The food-delivery start-up has seized on the pandemic-fuelled boom in demand for meals brought to your door, as well as investor exuberance over new stock listings as it moves ahead with its IPO. Revenue in the first nine months of the year more than tripled and its net loss narrowed from a year earlier on a surge in new customers, the company said in the filing.

At the midpoint of the range, DoorDash expects to raise about US$2.96 billion after deducting expenses from the IPO. The company said it plans to use the proceeds as working capital and may devote a portion to acquiring other companies or technologies. Though the company said it doesn’t have any commitments for “material acquisitions or investments” now.

(Photo: Downtown Greensburg Project)

Companies have raised more than US$320 billion from IPOs this year compared with about US$195 billion in the same period in 2019, according to data compiled by Bloomberg. Several more are expected before the end of the year as companies that put off listing plans during the early days of the Covid-19 pandemic regain the confidence to put their shares on public markets.

The company’s offering is being led by Goldman Sachs Group Inc and JPMorgan Chase & Co, with Barclays Plc, Deutsche Bank AG, RBC Capital Markets, and UBS Group AG also on the deal. DoorDash is planning to list its shares under the symbol DASH.