Seven years after being founded, the leading American food delivery company DoorDash IPO went public last Wednesday on the New York Stock Exchange (NYSE). Capping the initial public offering at $102 per share, DoorDash started to trade at $182 a share, which is 78% more than the IPO price. The market closed on Wednesday with the startup selling about 86% of its offering. Aiming an initial price of $75 to $85 per share, DoorDash traded at an inflated number and managed to record a commendable performance at the exchange.
DoorDash Business Model At a Glance
Ever since its initiation in 2013, DoorDash has amplified its reach onboarding 340,000 restaurants all over the United States. Instead of using a third-party fleet service for its deliveries, the company chooses to hire its own delivery partners called “Dashers”. DoorDash operates with a unique business model and charges a commission for every order delivered. You can read about its business structure in detail here.
Why was DoorDash’s IPO a success?
The pandemic aided the company as it thrived this year with people opting takeouts instead of for an in-dining experience. During the first nine months of 2020, DoorDash filed in revenue of $1.9 billion, which rested at $587 million for the same duration last year – that is a staggering 226% hike up.
And it’s not just this year when the food delivery service boomed, 2019 was a good year for DoorDash too. It recorded a revenue of $885 million, which was 204% more than the previous year. Although delivery businesses took a hit this year, they are estimated to bounce back in the coming months. Nonetheless to say, DoorDash is reckoned to see an increase in operations with an eventual expansion. Recent market trends worked in favour of the delivery app as it closed the first day.
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How can you start a business like DoorDash?
DoorDash dominates the American food delivery market with about 45% of orders placed on its platform. As of now, DoorDash only serves in the food segment. But keeping in mind the steady growth it has garnered over the last few years, DoorDash can soon enter into other on-demand logistical domains.
The on-demand delivery industry has leveraged the power of “now” shaping customer experiences in real-time and is expected to take in more entrepreneurs under its wing. With constant digitization, there has never been a better time to launch a delivery business of yours! Here are a few tips to consider when launching your food marketplace.
Finding out the gap – As a market that’s fiercely populated with multiple marketplaces, what is that makes yours stand apart? Is it exceptional customer service or less delivery time? Your customers will vouch for your credibility if you have something unique to offer.
Level up your marketing – Initial penetration of the market is not a cakewalk for any new business. Chart out a marketing blueprint and how you’re going to get the word out.
Hire a reliable delivery fleet – Your delivery team is the closest touchpoint for the customer during the purchase lifecycle. Make sure you work with a competent and dependable delivery team.
Choose a plug and play solution – An online marketplace builder can give you a major headstart for your food delivery business. An ideal option should provide you features like website customization, unwavering customer support, marketing tools, ergonomic interfaces, to name some.
A marketplace builder like Yelo makes it much easier to get started in a short time and with limited resources.
Wondering how to start?
Creating an app like DoorDash will require you to set up and manage the three aspects of your delivery business – restaurant partners, end customers, and delivery fleet.
Our Solution comes in handy with integrated dashboards loaded with pre-made features for all three wings of your food delivery marketplace.
App for your restaurant partners – Design customized app for your onboarded restaurants giving them the ease to accept and manage orders from their end.
App for your customers – Offer them a robust platform to place and track their order. Create your customer-end website with Yelo’s personalized themes, live-tracking, and many payment gateway options.
Dashboard for easy management – You have full control of your marketplace on your dashboard. Manage your product catalogues, restaurant partners, and marketing from a single unified point. Track your analytics to leverage data for your future strategies.
Another important feature, an ideal delivery marketplace must offer is a route optimization and real-time tracking. With our seamless delivery management software, you can ensure your food deliveries are fulfilled well within the expected time window.
See how it works
Even after losing out and gaining some, DoorDash seems to be well on its way to capture a higher market share as it chose to go public this year. This is a cue for soon-to-be entrepreneurs to explore the on-demand food segment to start something of their own. Sign up with Jungleworks and avail your free 14-day trial now!