Food delivery firm DoorDash lands $400 million in financing

Food delivery company DoorDash said late today that it raised $400 million in Series F financing from a group co-led by investors Temasek and Dragoneer Investment Group. Existing investors  Softbank Vision Fund, DST Global, Coatue Management, GIC, Sequoia Capital, and Y Combinator also participated, the San Francisco-based company said.

The company, founded in 2013 by four students at Stanford University, started out providing on-demand deliveries from restaurants to customers. It has since expanded into grocery deliveries, and through its DoorDash Drive platform, has made its last-mile delivery services to all customers. Its last funding round was in October 2018.

The company now operates in 3,300 cities, and it touts itself as the first on-demand platform to operate in all 50 states. DoorDash more than quintupled its geographic coverage during 2018 from its 2017 size, it said. It was reported in December 2018 that DoorDash overtook Uber Eats to hold the second position in total U.S. food delivery sales, behind only GrubHub.

In April 2017, DoorDash agreed to pay $3.5 million to settle a class-action lawsuit alleging that it misclassified its drivers as independent contractors. The company agreed to pay an additional $1.5 million if certain conditions were met. Under terms of the settlement, the status of contractors would not be changed to that of company employees, according to published reports. However, DoorDash said it would change some policies to improve clarity and ensure more rights for the workers, according to the reports.