DoorDash hit it big with a $535 million Series D round of funding led by Chinese business conglomerate SoftBank Group, the food delivery company announced this morning.
It’s the largest financing for a U.S. food delivery service, according to Reuters, which said the funding gave DoorDash a $1.4 billion valuation, citing a person familiar with the deal. Existing investors Sequoia Capital, GIC, and Wellcome Trust also participated in the deal, according to DoorDash.
The cash windfall will mean rapid expansion for DoorDash, which plans to increase its service to 1,600 cities from about 600. DoorDash says only 5 percent of restaurant orders are placed online, and it has added services to entice more online ordering and gain a larger share of the delivery market, such as delivering food for restaurants that directly receive an order from a customer (rather than one it being placed through the DoorDash app).
The half-billion dollars in funding may make it easier for DoorDash to successfully expand than some of its competitors, such as Austin, TX-based Favor, which withdrew its national presence to Texas before selling to grocer H-E-B last month. The online delivery market is a crowded one, with companies such as Amazon (NASDAQ: [[ticker:AMZN]]), Uber, Postmates, and GrubHub (NYSE: [[ticker:GRUB]]) dominating a large share.
DoorDash raised $127 million in 2016 and $40 million a year earlier.
