Food delivery company DoorDash Inc. is said to be negotiating a new round of funding. The startup is in the process of raising an estimated $500 million, according to reports by both The Wall Street Journal and Skift Table.
The new round of funding would value San Francisco-based DoorDash between $6 billion and $7 billion, according to the reports, which cite unnamed sources familiar with the details.
The funding is said to be led by Singapore’s state investment firm Temasek Holdings Pte. The specific amount could still vary, as the details have yet to be finalized.
The funds would allow DoorDash to continue to compete in the competitive delivery business, which has impacted how so many restaurants do business. While big-time player Grubhub is already publicly traded, two of its third-party delivery competitors are going the IPO route. Postmates Inc.—which recently raised $100 million in equity funds to bring its valuation to $1.85 billion—confidentially filed for a public offering earlier this month. Uber Technologies Inc., parent of the Uber Eats deliverer, is also expected to join the others on the stock market as it prepares for an IPO this year.
The third-party delivery services brought in about $5 billion during the first half of 2018, according to Technomic. At the time, Grubhub remained the dominant force, with about 52% market share. Others, though, have shown growth. Uber Eats has an 18% share, DoorDash has about 12% market share and Postmates has approximately 9%—though those numbers differ across the country, with Postmates and DoorDash being the power players on the West Coast.
DoorDash has also expanded its services beyond the traditional delivery model. Last fall, the company added a subscription service, DashPass, that gives users unlimited delivery for $9.99 a month. The company also launched DoorDash Pickup, allowing customers to order from its app and pick up food from the restaurant for free.
DoorDash did not immediately respond to a request for a comment.