This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
Food delivery giant Doordash is going public at perhaps the best possible time for its business.
There’s a lot to be optimistic about in DoorDash’s filing: It is the largest food delivery player in the U.S. and has grown only larger in the pandemic. Revenue more than tripled in the first three quarters of 2020 to $1.92 billion compared to the same period last year—and it wasn’t merely through ramping up promotions or advertisements. Losses in the period after all narrowed from $533 million to $149 million.
While the pandemic delivery story is undoubtedly one of rising tides lifting all boats, DoorDash’s boat has managed to rise higher than its competitors, taking about 49% of the market share by September 2020 compared to around 34% a year earlier.
Last valued at $16 billion, DoorDash is also no longer burning through cash, generating $315 million in those months compared to the $308 million it razed in the same period a year earlier. And in yet another boon for the bulls: The company showed signs of profitability in the second quarter of 2020, gaining $23 million before swinging back to a loss of $43 million the following quarter.
But therein lies a key problem: DoorDash was only able to show profitability at the height of the lockdowns. Can it keep its pandemic boost?
Bulls will argue that stay-at-home orders have fundamentally shifted consumer behavior, forcing some who have resisted the app age to sign up UberEats or Instacart. No doubt that is true—but it seems highly unlikely that any food delivery service will be able to maintain the blistering pace of growth achieved this year as consumers eventually return to in-person dining. (DoorDash acknowledges as much in its filing: “We expect the growth rates in revenue, total orders…to decline in future periods”).
As pre-pandemic times have shown us, profitability in those days was elusive as businesses undercut each other in fees and with discounts. Now, competition is slated to become even more aggressive, if GrubHub’s $7.3 billion price tag for Europe’s Just Eat Takeaway.com or Uber’s near $2.7 billion bid for Postmates are anything to go by.
The tension between restaurants and food-delivery services, meanwhile, has only strengthened as small businesses hanging by a string feel the weight of merchant fees more than before. Restaurants, facing a huge decline in dining, have successfully asked cities to cap fees on third-party delivery providers.
It still seems likely investors will bite. But the question is if DoorDash can gain and maintain the lofty valuation it is seeking to achieve—$25 billion—even after the pandemic.
- MindTickle, an India-based sales readiness platform, raised $100 million in funding. SoftBank Vision Fund 2 led the round and was joined by investors including Norwest Venture Partners, Accel Partners, Canaan, NEA, NewView Capital, and Qualcomm Ventures.
- Inceptio Technology, a Shanghai-based autonomous truck company, raised $120 million in funding. Contemporary Amperex Technology led the round and was joined by investors including GLP, G7, and NIO Capital.
- PTM Biolabs, a Chinese firm developing proteomics technology to help diagnose and treat human diseases, raised 530 million yuan ($80 million) in Series B funding. IDG Capital led the round.
- Form Energy, a Somerville, Mass.-based startup seeking to make battery systems to better store wind and solar energy, said it has raised $70 million in Series C funding. Investors have not yet been disclosed. Read more.
- Grofers, an online grocery store, is reportedly in talks to raise $55 million to $60 million from the SoftBank Vision Fund and other existing investors. Read more.
- Harbr, a London-based data exchange company, raised $38.5 million in Series A funding. Dawn Capital and Tiger Global Management led the round and were joined by Mike Chalfen, Boldstart Ventures, Crane Venture Partners, Backed and Seedcamp.
- Zeotap, a Berlin-based platform for analyzing customer behaviors, raised $18.5 million in Series C funding. SignalFire led the round.
- KYKLO, a New York City-based e-commerce and sales management company, raised $8.5 million in seed funding. Felicis and IA Ventures led the round.
- Griffin, a London-based banking platform for launching new financial products and services, raised £6.5 million ($8.6 million). EQT Ventures led the round and was joined by investors including Seedcamp, Tribe Capital, Paul Forster (co-founder Indeed.com), Matt Robinson (co-founder Go-Cardless/Nested), and Carlos Gonzalez-Cadenas ( former COO GoCardless).
- Ride Vision, a maker of collision-aversion technology for motorcycles, raised $7 million in Series A funding. OurCrowd led the round.
- Silofit, a Canada-based provider of private fitness spaces, raised CAD$3.5 million in seed funding. Investors included Whitecap Venture Partners, Courtside Ventures, NFL player Ndamukong Suh, and Alate Partners.
- LILA Games, an India-based mobile game studio, raised $2.8 million in seed funding. BITKRAFT Ventures led the round and was joined by investors including Galaxy Interactive.
- Bain Capital Private Equity agreed to acquire a majority stake in US LBM, a Buffalo Grove, Ill.-base distributor of specialty building materials. Financial terms weren't disclosed.
- Main Capital Partners acquired a majority stake in Pointsharp, a Stockholm-based provider of identity management services. Financial terms weren't disclosed.
- BC Partners agreed to acquire Keesing Media Group, a European maker of puzzle games, from Ergon Capital and Mediahuis. Financial terms weren't disclosed.
- Clearlake Capital Group agreed to acquire PriSo Holding Corporation, a distributor of specialty building materials serving residential, commercial, and industrial new-construction and remodeling markets, from Platinum Equity. Financial terms weren't disclosed.
Breakups and Hangups
- Simon Property Group (NYSE:SPG) cut its purchase price for an 80% stake of rival Taubman Centers (NYSE:TCO), a rival mall operator, by 18%. Simon will pay $2.65 billion for the stake. Read more.
- Walmart (NYSE: WMT) sold most of its stake in Seiyu, a chain of Japanese supermarkets, to KKR and Rakuten valuing the firma at 172.5 billion yen ($1.65 billion).
- PNC Financial Services Group (NYSE:PNC) is in talks to acquire the U.S. arm of BBVA (MC:BBVA) for more than $10 billion. Read more.
- Hanjin Kal (KS:180640), owner of Korean Air Lines, may acquire Asiana Airlines, (KS:020560)m a South Korea-based airline, per Yonhap. Read more.
- Cisco agreed to acquire all of the assets of Banzai Cloud Zrt, a Budapest-based maker of cloud-native application development, deployment, runtime and security workflows. Financial terms weren't disclosed.
- MyMDPharmaceuticals (Nasdaq: MYMD), a drug developer targeting age-related therapeutics, and Akers Biosciences (Nasdaq: AKERS), a developer of health information technologies, agreed to merge. Financial terms weren't disclosed.
- Galaxy Digital (TSX: GLXY) acquired DrawBridge Lending and Blue Fire Capital, two cryptocurrency trading firms. Financial terms weren't disclosed.
- Bumble, an Austin-based dating app maker, is readying for an IPO next year. Blackstone backs the firm. Read more.
- Nordnet AB, a Swedish digital savings and investing platform, plans raise as much as 9.8 billion kronas ($1.1 billion) via an IPO on the Nasdaq Stockholm. The stake will be offered by investors including Nordic Capital and Öhman Intressenter. Read more.
- Nuix, an Australian security software firm, plans to raise A$975.3 million ($705.2 million) in an IPO in the country. Macquarie Capital backs the firm.
- Yatsen Holding, a Guangzhou, China-based maker of cosmetics, plans to raise $558 million (36% bought potentially by existing shareholders) in an offering of 58.8 million ADSs priced between $8.50 to $10.50. Investors including . Hillhouse Capital and Tiger Global back the firm. Read more.
- C3.ai, a Redwood City, Calif.-based company developing ways to deploy AI applications, filed for an $100 million IPO. TPG and Baker Hughes back the firm. Read more.
- BioAtla, a San Diego, Calif.-based biotech developing therapies for solid tumor cancers, filed for a $100 million IPO. Backers include Pfizer Ventures, Soleus Private Equity, and HBM Healthcare Investments. Read more.
- 17 Education & Technology Group, a Beijing-based provider of K-12 education services, filed to raise $100 million. Shunwei Ventures backs the firm. Read more.
- Kinnate Biopharma, a San Diego, Calif.-based oncology biotech, filed to raise $100 million. Its backers include Foresite Capital, OrbiMed, and RA Capital Management. Read more.
- Sigilon Therapeutics, a Cambridge, Mass.-based biotech developing therapeutics for chronic diseases, filed for an $100 million IPO. Flagship Pioneering and Eli Lilly back the firm.Read more.
- PubMatic, a Redwood City, Calif.-based cloud infrastructure platform, filed to raise $75 million. Read more.
- CF Finance Acquisition III, a blank check company formed by Cantor Fitzgerald, raised $200 million.
- Centerbridge Capital Partners is seeking to raise $6 billion for its fourth fund. Read more.
- LongRange Capital, a private equity firm, named Amar Doshi as a senior principal.