Service Level Sample: Pre-IPO Private Company News
Company Name: DoorDash
Ticker Symbol: DASH
Region: USA
Industry: Logistics – Food Delivery

DoorDash’s Potential IPO Would Come Amid Pandemic-Related Boost in Demand for Food Delivery

(MT Newswires) – – DoorDash’s initial public offering plans may have been set back by COVID-19, but the pandemic also could be a boon for the food-delivery company’s IPO plans as it has boosted demand for food-delivery services.

DoorDash first announced its intention for an IPO in late February as the company said it had confidentially submitted a draft registration statement with the Securities & Exchange Commission. At the time, the company said it expected the IPO to occur after the SEC completes its review process, subject to market and other conditions.

Shortly thereafter, market conditions changed; the IPO market came to a halt in March as COVID- 19 was declared a pandemic and the US economy and stock market sank amid restrictions across the US for business and services that were considered nonessential.

However, as in-person dining was limited, demand for takeout food increased, which was a boon to food-delivery companies. And as the economy began reopening, US stocks recovered the losses seen earlier in the pandemic.

DoorDash raised $400 million in a June private placement that valued the company at almost $16 billion. The company hasn’t publicly commented on its IPO plans since late February and the company didn’t respond to an MT Newswires request for comment. However, an August report by Bloomberg citing people familiar with the matter said DoorDash was then taking steps to go public in November or December.

Such an offering would come as restrictions have eased and restaurants have reopened their doors but consumers are still using food-delivery services much more than before the pandemic. Some analysts are predicting consumers’ use of food-delivery services has become a habit that will be sustained even beyond the pandemic.

“We continue to expect the pandemic to accelerate the shift toward online ordering of food delivery and takeout,” Canaccord Genuity analysts Maria Ripps and Michael Graham said in a late-July note to clients after food-delivery company Grubhub (GRUB) reported better-thanexpected second-quarter results. Ripps and Graham highlighted that Grubhub saw momentum continue into the third quarter “despite the gradual reopening of the economy, signaling that COVID-19 has likely created a more permanent pull-forward of adoption as opposed to a temporary spike in demand.”

Highlighting that trend, credit and debit card usage across the US showed a 78% year-over-year increase in consumer spending on food delivery in late September, according to data compiled by Goldman Sachs Global Investment Research. While that is smaller than a 94% jump recorded in mid-August, it still reflects significant year-over-year growth for the food-delivery sector.

DoorDash hasn’t released full financial results but said in a recent economic impact report that restaurant revenue and DoorDash driver (known as Dasher) income generated through the DoorDash platform accounted for $13.2 billion in direct, indirect and induced economic activity in 2019.

The report also described DoorDash as having become “an even more important source of revenue for restaurants during COVID-19.” It noted that prior to the pandemic, only one out of 20 operators saw more than 20% of sales originate from third-party delivery platforms. During the pandemic, however, “over a quarter of operators saw greater than 20% of overall sales originate from third-party delivery platforms,” the company said in the report.

However, KeyBanc’s Eric Gonzalez sees the economics of third-party marketplaces as “unsustainable in their current form, even as consumer demand continues to rise at a rapid pace,” the analyst said in a note to clients late last month. Gonzalez noted large privately held delivery marketplaces like DoorDash and Postmates have “enjoyed a seemingly unlimited budget to drive growth” thanks to being backed by deep-pocketed venture capital firms and fueled by funding rounds with steadily rising private market valuations.

Nevertheless, Gonzalez added, if DoorDash is moving closer to a public offering, that “might mean a greater focus on profitability is likely in the near future and that the deepest customer incentives are largely in the past.”

As such, he expects the path forward for marketplaces “likely means consolidation, a change in fee structure (e.g., passing on more to the consumers), and/or scaling back in unprofitable markets (e.g., rural areas).” Gonzalez noted deal activity has already picked up; Grubhub recently agreed to be acquired by Just Eat Takeaway while Uber Technologies (UBER) is acquiring Postmates.

Copyright © 2021 MT Newswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

Service Level Sample: Pre-IPO Private Company News
Ticker Symbol(s): AHM, HOMS, MVNR, LESL, ALGM, GLTO, IKT, INAB
Region: USA

Summary: IPO Market Pauses Amid Election, Pandemic Turmoil; Inhibikase Cuts Size of Its Offering by 40%

(MT Newswires) – – US private companies planning to go public shied away from initial public offerings over the past week, putting their plans on hold amid the turmoil of the COVID-19 pandemic and the presidential election.

The sudden dearth of IPOs came after several companies – AmeriHome (AHM) and Caliber Home Loans (HOMS) and software provider Mavenir (MVNR) – postponed their IPO plans late last week as the stock market tumbled on concerns about escalating COVID-19 cases.

Still, regulatory filings for IPOs continued to roll in this week although one — for clinical-stage pharmaceutical company Inhibikase Therapeutics — showed a 40% cut to the size of the company’s planned offering.

IPO ACTIVITY:
The IPO market hasn’t seen any debuts since the Oct. 29 debuts of pool retailer Leslie’s Inc. (LESL), semiconductor technology company Allegro MicroSystems (ALGM) and clinical-stage biotechnology company Galecto (GLTO). Since then, shares of Leslie’s have jumped 13%, Allegro MicroSystems shares have surged 29% and Galecto shares are up 9.3%.

AmeriHome, Caliber Home Loans and Mavenir had also been scheduled to go public on Oct. 29 but have yet to.

In delaying its IPO last week, Caliber said it would “continue to evaluate the timing for the proposed offering as market conditions develop.” Mavenir cited market volatility for its IPO postponement and said it would “reassess the market conditions in the coming months and will keep the market informed.” AmeriHome didn’t make any statements on the postponement and declined to comment to MT Newswires.

IPO FILINGS:
Inhibikase Therapeutics, a clinical-stage pharmaceutical company developing therapeutics for Parkinson’s Disease and related brain disorders, said it expects to offer nearly 1.4 million shares of common stock at an expected price of $10 to $12 per share. This represents a 40% reduction from the company’s plan in October to offer 2.3 million shares at the same price range of $10 to $12 each. The common stock has been approved for listing on the Nasdaq Capital Market under the symbol IKT.

This week’s regulatory filings also included the unveiling of an expected price range for the upcoming IPO of IN8bio, a clinical-stage biotechnology company focused on cancer treatments using gamma-delta T cells. IN8bio said it expects to sell nearly 4.7 million of its common shares at a price of $15 to $17 pe share. The common stock has been approved for listing on the Nasdaq Global Market under the symbol INAB.

Other companies that made filings over the past week for future IPOs include Upstart Holdings, a provider of a cloud-based artificial intelligence lending platform. The company plans to list on the Nasdaq Global Select Market under the symbol UPST. Expected pricing details haven’t been released.

LOOKING AHEAD:
Reports said home-rental and vacation company Airbnb is likely to make an IPO registration public next week to put it on track for a December IPO. Reports have said the company’s IPO could raise about $3 billion.

Copyright © 2021 MT Newswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.