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DoorDash made its highly anticipated debut on Wall Street on Wednesday, after a year of surprisingly strong growth fueled by the coronavirus pandemic.
The food delivery company reportedly raised $ 3.4 billion on its IPO after raising the price of shares sold during the IPO to $ 102 from a range of $ 90 to $ 95 .
Company actions started trading on Wednesday noon on the New York Stock Exchange under the symbol DASH.
“I feel good,” Tony Xu said before the trade began. “I am very grateful for all of the hard work everyone has done over the past seven years inside our walls… and very excited about the future”
The company joins other tech companies that made their public debut this year, including a video conferencing technology company Zoom, cloud storage company Snowflake and data analytics company Palantir. Airbnb home rental service expected to go public later this week.
DoorDash’s IPO comes as consumers and restaurants increasingly relied on food delivery during the pandemic, which tripled DoorDash revenue year over year during the first nine months of the year.
Xu spoke to Fortune Wednesday. His answers have been edited for length and clarity.
Fortune: What did you learn about investor appetite during the roadshow?
Piece of money: We saw that there was a lot more demand than the stock we can actually issue and allocate. It really was a reflection of the strength of the underlying business. These fundamentals that we describe are revealed in our S-1, and in particular similar cohort economic information has given people a look under the hood and may have surprised them. This is contrary to some of the accounts that I think have already been written about this industry.
On the other hand, it was a reflection of their enthusiasm for the future. DoorDash, having built the largest on-demand audience for food, certainly has an opportunity to go beyond food, and we’re with our launches in categories like convenience and groceries. Having built the largest local logistics network serving 390,000 restaurants, I think people are really excited about what this could become in the future.
What are your plans for the funds collected?
Like I said internally at the company about all the funding – and that’s just funding – is that you don’t have to spend it all at once. In fact, the only investments we make today are distributions from our Main Street Strong initiative.
It’s a $ 200 million commitment, which we made about a month and a half ago, over five years by investing in our merchants and our Dashers. [the company’s term for the contractors who deliver for the company]. Twelve million dollars are rewards, from $ 500 to $ 20,000, for the Dashers who have been with us and made over 5,000 deliveries. We are distributing $ 10 million to traders to make sure they can survive winter, one of the most difficult times of the pandemic.
As we add new use cases, we are building more products like in-store pickup and DoorDash for Work service desks, which I think will come back once we’re out of the pandemic. We are building more products on our platform to complement what we already have as DoorDash Storefront, [software that gives restaurants the ability to create their own online stores], and DoorDash Drive, [the company’s white-label delivery software that it licenses to other businesses with delivery operations]. And we are looking for opportunities for geographic growth.
How has it been to hold an IPO during the pandemic?
Well that’s a lot of starts and stops. We started our planning process to become a public company a year and a half ago. Clearly, no one envisioned a pandemic.
When the pandemic hit at the end of February in early March, we put the plants for the IPO on the shelves. We’ve taken action, solving our audience’s issues, distributing tens of millions of units of PPE, cutting commissions by 50% for restaurants, and investing in the community by providing free deliveries to hundreds of thousands of healthcare workers.
Once we got a little more wind under us this summer, we brought back plans for the IPO.
The process has certainly been a journey. It was tumultuous.
What are the biggest priorities ahead?
We have a lot on our plate. We must continue to focus solely on creating a better product experience. We need to improve our selection of restaurants. We need to improve the quality of delivery itself. We need to make our service more affordable. We need to make our system more efficient. This is the main thing.
We are so early in the opportunity just in food. Only 10% of the restaurant industry delivers today. Ninety percent still goes through a phone call, a curbside pickup, a steering wheel control. These physical experiences are increasingly digitized into e-commerce experiences, and we are helping [restaurants] make this transition. It’s just a huge opportunity.
We fall into other categories, we believe we can bring it all to your city in minutes, not hours or days. And we are evaluating launch opportunities in new geographies.
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