DoorDash Market Value To Hit $32.4 Billion

DoorDash's initial public offering is expected to raise the company's market valuation to around $32.4 billion.

The company priced its stock above its initial range.

The company, which will list Wednesday, will sell its shares at $102 each - above its planned range of between $90 and $95 each. The initial public offering is expected to be one of the year's largest in terms of capital raised. DoorDash will be the highest-valued food-delivery company on the New York Stock Exchange.

DoorDash's expected market valuation is more than double its $15 billion private valuation earlier in the year and more when compared with its $1.4 billion in 2018.

The initial public offering is the first of many planned late-year listings by American technology startups. Home-rental company Airbnb is expected to launch later this week while e-commerce company Wish is set to list next week. Later in December financial technology company Affirm and video game developer Roblox are both expected to list.

DoorDash has capitalized on changes in consumer behavior as a result of the health crisis. Like other e-commerce and software companies, DoorDash experienced a boom in its business as people shifted to working and studying at home.

For its latest quarter, DoorDash reported a 268% increase in revenue to more than $879 million. The company's order volume over the first nine months of the year grew to $16.5 billion from $5.5 billion last year.

According to its exchange filing, DoorDash said it controlled about 50% of the U.S. food delivery market. It said it outpaced competitors Grubhub and UberEats in terms of delivery volume.

Market experts said there was an inherent risk that the company was expected to face in the coming months - particularly in a post-pandemic business environment. DoorDash acknowledged this in its prospectus and told market participants that its growth over the past quarter would likely be unsustainable.

"The circumstances that have accelerated the growth of our business stemming from the effects of the COVID-19 pandemic may not continue in the future and we expect the growth rates in revenue, total orders and marketplace GOV to decline in future periods," DoorDash said.