DoorDash, the country’s largest grocery shipping company, announced Tuesday that it would price its shares at $ 102 each, equivalent to an IPO of around $ 3.4 billion and valued the company at around $ 39 billion.
DoorDash had already raised its price range in response to demand from potential shareholders as it prepared to trade under the symbol “DASH” on the New York Stock Exchange on Wednesday. The company was most recently valued at $ 16 billion by private market investors.
DoorDash’s IPO is part of a parade of valuable startups looking to go public before the end of the year. The buoyant stock market, driven in part by low interest rates and strong growth in tech companies, made 2020 the busiest year for an IPO since 1999.
The start-up Airbnb is expected to value its shares on Wednesday and start trading on Thursday. The proposed price range has also been raised following signs of strong investor demand.
Both DoorDash and Airbnb plan to list their stocks using a novel “hybrid auction” system to prevent the stock price from “popping” on the first day of trading.
While the pandemic has devastated parts of the economy, it has been a boon for many tech companies. People stuck at home have relied more on delivery services. DoorDash revenue more than tripled to $ 1.92 billion in the first nine months of the year, compared to $ 587 million for the same period last year. However, growth is likely to slow down in the future. The company is unprofitable.
DoorDash is based in San Francisco and has more than 18 million customers and one million drivers. It has recently expanded beyond grocery delivery to include groceries, pet food and convenience store items.