DoorDash Will Put an End to Old-School Delivery—And Smaller Rivals

Just a couple of weeks after rival Postmates filed to go public, on-demand delivery service DoorDash announced a $400 million Series F, valuing the company at a whopping $7.1 billion.

What does the big money mean for the crowded on-demand delivery space? The market is growing as a whole, but there isn’t all that much growth share to go around. DoorDash CEO and founder Tony Xu has said as much. 

“If you look at where the U.S. is, there’s two players gaining share. It’s DoorDash and Uber. And DoorDash is growing 65% faster,” Xu said in a conversation with Recode editor-at-large and co-founder Kara Swisher earlier this year.

As it establishes a more and more dominant market position, DoorDash will be able to leverage its partnerships with major retailers and long-term growth trajectory to justify slimmer margins, pushing rivals out of the market. The company is now operating in all 50 states, has the trust of number-one retailer Walmart, and has launched a subscription service to make the most of loyalty.

DoorDash surpassed Uber Eats in the U.S. online food delivery market in November.

Joe Zappa is Street Fight’s Managing Editor.