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DoorDash IPO bets that the pandemic has accelerated change – TechCrunch

DoorDash has become the go-to delivery choice for millions of people cooped up during the pandemic this year. Will they stay as life returns to normal after the vaccine? What will be “normal,” anyway?…

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DoorDash has become the go-to delivery choice for millions of people cooped up during the pandemic this year. Now it has filed an S-1, revealing its financials as it nears a long-intended IPO. These innards show an exciting business — and a larger story about how the year is going for tech companies in general.

When the company filed initial public offering paperwork back in February, it was coming off of an expensive year of growth in 2019. The California state legislature was passing laws, meanwhile, that directly targeted its gig-economy labor model. Then the pandemic hit. More from Alex Wilhelm:

DoorDash has grown incredibly rapidly, scaling its revenues from $291 million in 2018 to $885 million in 2019. And more recently, from $587 million in the first nine months of 2019 to $1.92 billion in the same period of 2020. That is 226% growth in 2020 thus far… How high-quality is DoorDash’s revenue? In the first three quarters of 2019, the company had gross margins of 39.9%, and in the same period of 2020 the figure rose to 53.1%, a huge improvement for the consumer consumable delivery confab.

The other jolt of good news for the company arrived last week. A California ballot proposition passed that preserved the contractor model it relies on for deliveries.

World events did not take a breath, though. A COVID-19 vaccine appeared on the horizon this week, and could lead to the pandemic ending as soon as next year. Will this be bad for DoorDash’s business? Alex took another look at the numbers for Extra Crunch, and didn’t come away with a clear answer. On the one hand, the company has been making ongoing investments in its delivery platform technology, which has helped to drive the success this year already. On the other hand, the S-1 is open about post-pandemic reality — profitability is going to decline. Alex:

To buy into the DoorDash IPO, especially at its currently floated $25 billion price, you have to believe that the company’s revenue growth will slow modestly at most. Otherwise the price makes no sense. Bearish investors who might expect the company to post negative growth in Q3 2021 won’t pay any price for DoorDash shares, but in between the two camps is a mess of vaccine timings, shifts in consumer behavior and macroeconomic questions that could determine how many American families can afford delivery. All of which will impact DoorDash’s future growth rates.

For those looking further out, DoorDash stock is about how you think the pandemic is going to change the world for the long term, or not. Are we going to be using DoorDash more often now for deliveries? Are we going to be at home as much in the first place? Or are we going to go back to offices, stores and restaurants like we did before?

Speaking of investors, Danny Crichton illustrates why it pays to bet on the world changing. The company has raised nearly $2.5 billion over the years. Today that includes an 18.2% ownership stake by Sequoia, 22.1% by the SoftBank Vision Fund, and 9.3% by Singapore’s GIC. As he writes for Extra Crunch, the founding executives Tony Xu, Andy Fang and Stanley Tang each own around 5% — smallish wedges of a growing pie. Maybe that is too much dilution? Or maybe, considering all of the other delivery companies that have failed or gone sideways, this is the pinnacle of success in the sector.

A health care worker holds an injection syringe of the phase 3 vaccine trial, developed against the novel coronavirus (COVID-19) pandemic by the U.S. Pfizer and German BioNTech company, at the Ankara University Ibni Sina Hospital in Ankara, Turkey

(Photo by Dogukan Keskinkilic/Anadolu Agency via Getty Images)

We all knew that at some point solutions would be figured out. But as COVID-19 cases have climbed this season, and as anxiety built around elections, it was hard to believe that the vaccine was right around the corner. The initial success reported Monday by BioNTech and Pfizer may mean that these two companies are close to success. But many other companies are attempting to use the same experimental gene-based vaccines so we may see others winners soon.

The stock market is already repricing tech stocks, in any case. Besides the timely arrival of the DoorDash S-1, here are a few other headlines about the impact of the news:

Positive vaccine news punishes pandemic-boosted companies like Zoom, Peloton, Etsy

What happens to high-flying startups if the pandemic trade flips? (EC)

As public investors reprice edtech bets, what’s ahead for the hot startup sector? (EC)

5 VCs discuss the future of SaaS and software after Pfizer’s vaccine breakthrough (EC)

Image Credits: John Artman

Here’s why, for those trying to understand this global company and its place across markets:

As Ant Group seizes the world’s attention with its record initial public offering, which was abruptly called off by Beijing, investors and analysts are revisiting the fintech interests of Tencent, Ant’s arch rival in China. It’s somewhat complicated to do this, not least because they are sprawled across a number of Tencent properties and, unlike Ant, don’t go by a single brand or operational structure — at least, not one that is obvious to the outside world. However, when you tease out Tencent’s fintech activity across its wider footprint — from direct operations like WeChat Pay through to its sizeable strategic investments and third-party marketplaces — you have something comparable in size to Ant, and in some services even bigger.

Serial founder Darshan Somashekar writes that if you want to build a great edtech product, then perhaps it should be a game. Here’s more, from his guest column for Extra Crunch this week:

Earlier this year, we launched Solitaired, a casual gaming platform that ties card games to educational experiences and brain training. We’re still early, but signs are encouraging: Our average time on site is 30 minutes, more than three times that of our earlier business. Even better, users come back often, on average returning more than five times per month. Since we’re now in the gaming space, we should have expected these metrics, but they still blew our expectations away. We’ve also found that the downsides can be mitigated. For example, high engagement has led to strong virality, driving down our CAC and increasing our growth. In-app purchase abuses can be tempting for game developers, but by focusing on user growth KPIs, we don’t have the desire to go down those routes. Lastly, the threat of Big Tech is there, but at present most of their attempts have yet to strike a chord among users. More importantly, that’s why choosing a market so massive that even individual Big Tech players can’t dominate is key: With a market this size, you can shoot for the stars, miss the moon and still do well for yourself.

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From Alex:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

The full Equity crew was on hand to debate the current venture capital market, curious about how risk-on, or risk-off things really are today. DannyNatasha and I framed the conversation around a number of news items from the week, including:

  • Wrkfrce has launched, and we wanted to chat more about the future of niche media, bringing The Juggernaut’s own recent round and the Quartz shakeup into the conversation.
  • And on the media front — always a risky venture capital investing domain — Spotify has snapped up another podcasting company, this time paying $235 for Megaphone. Our take? A string of small exits probably won’t encourage VCs to take on more risk in the space (Hunter Walk said the same thing here.)
  • Turning to risk more generally, I asked Natasha to weigh in on the earlier stages of the venture market, and Danny on its later tranches. There’s still lots of money, but it appears more focused on chasing winners than bolstering or supporting less-obvious startups.
  • That market is not slowing a risk-on move toward more venture capital players, as the Spearhead news showed a new focus for the firm to invest in emerging fund managers.
  • And there’s still plenty of risk tolerance in remote-work solutions like Hopin, which just raised $125 million at a $2+ billion valuation. We’re torn on the round, but Danny likes it and he’s a former VC.
  • And we wrapped with a chat about upcoming IPOs, and the recent SoftBank results. If DoorDash, Airbnb and others are going to go this year, they need to go soon. So far, no dice.
  • It was a busy week, despite the month. Expect more of the same next week.

    Finally, don’t forget that our own Chris Gates is cutting Equity videos out of every episode that you can find over on YouTube. He does a great job and it’s great to be on video, as well as audio platforms.

    Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

    Source: https://techcrunch.com/2020/11/14/doordash-ipo-bets-that-the-pandemic-has-accelerated-change/

    [ALT0]

    Techcrunch

    The DL on CockroachDB – TechCrunch

    As college students at Berkeley, Spencer Kimball and Peter Mattis created a successful open-source graphics program, GIMP, which got the attention of Google. The duo ultimately joined Google, and even personally got kudos from Sergey Brin and Larry Page. Kimball and Mattis quickly rose to prominence within the company, and then chose to leave it […]

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    As college students at Berkeley, Spencer Kimball and Peter Mattis created a successful open-source graphics program, GIMP, which got the attention of Google. The duo ultimately joined Google, and even personally got kudos from Sergey Brin and Larry Page. Kimball and Mattis quickly rose to prominence within the company, and then chose to leave it all behind to start what would eventually become CockroachDB. Years later, Cockroach Labs has over 250 employees and has received investments from the likes of Benchmark, GV, Index Ventures and Redpoint totaling more than $350 million, according to Crunchbase. The company is now on route to what some think is an “inevitable IPO.”

    The story of CockroachDB, from its origin to its future, was told in a four-part series in our latest EC-1:

    I’m biased, but it’s a must-read that gets into tensions that any startup founder can relate to: from navigating heavyweight competitors, to growing past free tiers, to maintaining your users’ attention. It’s the eighth EC-1 we’ve published to date, which my colleague and TC Managing Editor Danny Crichton estimates puts us at 90,000 words all about startup beginnings, product development, marketing and more.

    In the rest of this newsletter, we’ll get into that WeWork book, bite-sized entrepreneurship and some SPACs. Follow me on Twitter @nmasc_. Or don’t, it’s your choice!

    The Cult of We

    Adam Neumann (WeWork) at TechCrunch Disrupt NY 2017. Image Credits: TechCrunch

    This week on Equity, Alex and I interviewed Eliot Brown, who wrote “The Cult of We” along with Maureen Farrell. Our conversation riffed on some of the book’s eyebrow-raising details and anecdotes, but mainly focused on what WeWork’s rise and fall did to the state of startups and tech journalism more broadly.

    Here’s what to know: Not much has changed. Jokes aside, Brown shared his notes on how the current boom in startup financings has a worrisome air of frenzy and fluff. He also chatted about how sometimes the most illuminating question can be a simple one: What makes you a tech company?

    More money, more problems?

    TikTok what again?

    tiktok glitch

    Image Credits: TechCrunch

    TikTok kept popping up throughout the week. Index Ventures, for example, noted how the firm’s TikTok account has amassed an impressive following and is a channel to talk to the younger generations. Nothing like some short-form videos to stay hip and relatable while raising $3 billion in one go.

    Here’s what to know: While TikTok has certainly changed the world, I worry when I see the allure of bite-sized content get edtech’d. Bite-sized content can be a nifty way to spread content, but it isn’t one-size-fits-all. Duolingo, which priced its IPO this week, still struggles to show meaningful learning outcomes and optimizes more for motivation than comprehension. This tension is a key note for companies like Numerade and Sololearn, which both raised this week, to not overly TikTok learning materials.

    Other edtech content for your eyes:

    So, SPACs

    hands signing check 1

    Image Credits: Bryce Durbin / TechCrunch

    It’s been awhile since I’ve used that acronym in Startups Weekly. That said, special purpose acquisition vehicles are still very much a thing and are still very much worth paying attention to.

    Here’s what to know: Lucid Motors’ SPAC merger was just approved. Reporter Aria Alamalhodaei writes that the move came after executives extended the deadline to vote to merge by one day after not enough investors showed up. “The issue is unusual but could become more common as more companies eschew the traditional IPO path to public markets and instead merge with SPACs,” she writes.

    Also special:

    Around TC

    If you haven’t already, please fill out TC’s ongoing growth marketing survey. We’re using these recommendations of top-tier growth marketers around the world to shape our editorial coverage and to build out TechCrunch Experts.

    Across the weekSeen on TechCrunch

    Seen on Extra Crunch

    Same time, same place next week? Bring a friend!

    N

  • Technical design “How engineers fought the CAP theorem in the global war on latency” (2,400 words/10 minutes)
  • Source: https://techcrunch.com/2021/07/24/an-inevitable-ipo-full-of-cockroaches-and-developers/

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    Twitter appoints resident grievance officer in India to comply with new internet rules – TechCrunch

    Twitter has appointed a resident grievance officer in India days after the American social media firm said to have lost the liability protection on user-generated content in the South Asian nation over non-compliance with local IT rules. On Sunday, Twitter identified Vinay Prakash as its new resident grievance officer and shared a way to contact […]

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    Twitter has appointed a resident grievance officer in India days after the American social media firm said to have lost the liability protection on user-generated content in the South Asian nation over non-compliance with local IT rules.

    On Sunday, Twitter identified Vinay Prakash as its new resident grievance officer and shared a way to contact him as required by India’s new IT rules, which was unveiled in February this year and went into effect in late May. Twitter has also published a compliance report, another requirement listed in the new rules.

    Earlier this week, the Indian government had told a local court that Twitter had lost the liability protection on user generated content in the country as it had failed to appoint compliance, grievance, and a so-called nodal contact officials to address on-ground concerns.

    Other internet giants including Facebook, Google, and Telegram have already appointed these local compliance officers in India.

    Internet services enjoy what is broadly referred to as “safe harbor” protection that say that tech platforms won’t be held liable for the things their users post or share online. If you insult someone on Twitter, for instance, the company may be asked to take down your post (if the person you have insulted has approached the court and a takedown order has been issued) but it likely won’t be held legally responsible for what you said or did.

    Without the protection, Twitter — which according to mobile insight firm App Annie, has over 100 million users in India — is on paper responsible for everything those users say on its platform. Indian police have already filed at least five cases against the company or its officials in the country over a range of issues.

    The new development should help assuage the tension between Twitter and the Indian government. A special squad of Delhi police made a surprise visit to two of Twitter’s offices in late May in what many perceived as an intimidation tactic. Twitter said at the time that it was “concerned by recent events regarding our employees in India and the potential threat to freedom of expression for the people we serve” and requested the Indian government to grant it three additional months to comply with the new IT rules.

    Earlier this week, Twitter told an Indian court that it was working to “fully comply” with the new rules.

    More countries are formulating similar requirements for tech giants in their nations. Russia President Vladimir Putin signed a law that mandates foreign social media giants to open offices in Russia. Any social firm with a daily user base of 500,000 people or more is required to comply with the new law.

    Internet services enjoy what is broadly referred to as “safe harbor” protection that say that tech platforms won’t be held liable for the things their users post or share online. If you insult someone on Twitter, for instance, the company may be asked to take down your post (if the person you have insulted has approached the court and a takedown order has been issued) but it likely won’t be held legally responsible for what you said or did.

    Source: https://techcrunch.com/2021/07/10/twitter-appoints-resident-grievance-officer-in-india-to-comply-with-new-internet-rules/

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    Don’t miss these highlights today, day one of TC Early Stage 2021: Marketing and Fundraising – TechCrunch

    Rise, shine and get your startup on, early founders. It’s Day One of TC Early Stage 2021: Marketing and Fundraising! Get ready to be schooled — in the best way possible — on essential skills, tips and tactics every founder needs to build a successful startup. And, like the sign says, the emphasis this time […]

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    Rise, shine and get your startup on, early founders. It’s Day One of TC Early Stage 2021: Marketing and Fundraising! Get ready to be schooled — in the best way possible — on essential skills, tips and tactics every founder needs to build a successful startup. And, like the sign says, the emphasis this time around is on marketing and raising funds — with plenty of experienced speakers to guide you.

    Pro (crastination) Tip: It’s not too late to attend. Buy a ticket at the virtual door.

    We’re about to highlight a few of the info-packed presentations on tap today — just to wet your whistle. But first, here’s how Ashley Barrington, founder of MarketPearl, described Early Stage 2020.

    They offered a great variety of sessions and speakers — top investors, founders and credible subject-matter experts — who gave unique insights based on personal experience. You get great mentorship through attending the Early Stage sessions. It’s like a mini masterclass in entrepreneurship.

    Be sure to check the event agenda to scope out what interests you the most. Remember, your pass includes video on demand. If you need to get a bit of work done or find that two sessions you want to attend conflict, relax. You can catch everything you missed later at your leisure.

    Nailing Your Pitch: Companies aren’t started at the moment of fund raising begins but they can often end there. Nailing your pitch is integral to success. Hear from Adina Tecklu, principal at Khosla Ventures, on how to tell your story and leave investors wanting more.

    How to Capitalize on Being Coached: Ted Wang, partner at Cowboy Ventures, comes from the legal world where he was a partner at Fenwick. In short, he’s seen his fair share of startup success and failure. At Early Stage, Wang will explain the value of coaching for startup founders, including the different types of coaches one might utilize, how to choose between them, and how to get the most out of a good coach.

    What’s Your Story? You can have a compelling product, but it’s a compelling story that puts your company into motion. In this session, Doug Landis, former Chief Storyteller and GTM leader from Box, Salesforce and Google, will share the core storytelling mechanics to help you nail your origin, product and customer stories that will get your company in motion.

    Deep Tech — How to Raise Early in a Notoriously Tough Category: The greatest evolutions in our history have not come from small technological steps, but giant leaps. Frontier tech is the future, but it’s not particularly accessible to average folks. Hear from IndieBio partner Pae Wu and HAX partner Garrett Winther on how to fundraise for your deep tech startup.

    School is now in session! It’s not too late to get access to the networking, the community and learning more about the best ways to drive your business forward. Get your ticket for instant access now!

    Be sure to check the event agenda to scope out what interests you the most. Remember, your pass includes video on demand. If you need to get a bit of work done or find that two sessions you want to attend conflict, relax. You can catch everything you missed later at your leisure.

    Source: https://techcrunch.com/2021/07/08/dont-miss-these-highlights-today-day-one-of-tc-early-stage-2021-marketing-and-fundraising/

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