DoorDash has perfected the investor cash on demand service. A mere five months after the food delivery app closed a $500 million investment from SoftBank that catapulted its valuation to $1.4 billion the company has taken on even more capital. The latest round, for $250 million at a valuation of $4 billion, is led by Coatue Management and DST Capital, and comes as the company is reporting a huge increase in delivery volume, according to this story from Axios.
It may be hard to remember, but we’re only a year removed from the time when many investors in Silicon Valley couldn’t have been more bearish on food delivery companies. The economics are brutal and customers are usually loyal to the restaurants rather than the delivery services. And with multiple players like Postmates, Caviar and UberEats all competing for customers, it’s a fractured market. This state of affairs can’t last. UberEats is successful, so that one is likely here to stay. But the future of others are less clear. A consolidation is inevitable. Perhaps DoorDash can use this new flood of cash to finally force the issue.