Delivery giant DoorDash Inc. is planning to sell its stock to the public, capitalizing on the growing trend of consumers embracing app-based deliveries as much of the world stays home during the pandemic.
The San Francisco-based company filed papers signaling its intent for initial public offering Friday.
“Technology has changed consumer behavior and driven a wave of demand for convenience,” the company said in its prospectus. “Recent events have further accelerated these trends, pulling the future of e-commerce forward for businesses large and small.”
Its revenues reflect the explosion in demand for delivery. Last year, DoorDash generated $885 million in revenue. During the first nine months of 2020, revenue more than doubled that to $1.9 billion. It was already growing before the pandemic. In 2018 it brought in $291 million in revenue.
But DoorDash has lost money each year since its founding and the company warned potential investors the losses could continue as the company anticipates increasing expenses. It had a net loss of $667 million in 2019 and $149 million in the first nine months of 2020. The company did turn a profit of $23 million in the second quarter this year, but followed that with a $43 million loss in the third quarter.
DoorDash said it expects to spend substantial resources developing its platform, including “expanding our platform offerings, developing or acquiring new platform features and services, expanding into new markets and geographies, and increasing our sales and marketing efforts.”
DoorDash, which was was founded in 2013 in Palo Alto, California, has more than 18 million customers and 1 million “dashers” who deliver food in the U.S., Canada and Australia. It has more than 390,000 merchants in its network.
The announcement came a week after delivery companies scored a major victory in California, where voters passed Proposition 22, which allows app-based delivery companies to treat drivers as contractors instead of employees. Before that passed, they were facing a future where they would have to treat drivers as employees with access to costly benefits such as overtime and sick days. Ride-hailing and delivery companies won an exception, and instead they’ll offer limited benefits such as health care subsidies to drivers who clock 25 hours per week.
It’s clear DoorDash waited to start the IPO process until after the vote on California’s Proposition 22, said Wedbush analyst Daniel Ives.
“That would have been an uphill battle had Prop 22 not passed in California,” Ives said. “That puts a dark cloud in the rearview mirror and really opens the spigot for investor appetite.”
DoorDash says it has captured 50% of the food delivery market in the U.S., followed by Uber Eats, Grubhub and Postmates. But the food delivery market is “fragmented and intensely competitive,” and its competitors have made acquisitions or strategic agreements to work together, the company warned. “In addition, certain of our competitors have recently acquired kitchens to enable them to produce and deliver food directly to consumers,” the company said.
With the novel coronavirus surging across most of the U.S. and other parts of the world, Ives sees even more growth for DoorDash and its main competitors next year. It’s possible that DoorDash will start making money in 2021, he said.
“The gold mine of growth is this COVID pandemic,” Ives said. “You’ve seen growth rates two or three times the best case scenarios given it’s the core artery for consumers not just in the U.S., but worldwide, to get their food.”
DoorDash will see continued growth in the next 12 to 18 months because the U.S. and other markets will probably see some form of pandemic lockdowns return as the virus worsens, he said.
“No industry has benefited more than food delivery,” he said. “In a horrific backdrop, a silver lining has been, from an economic perspective, it’s been a huge positive for these workers, drivers and restaurants that could utilize companies like DoorDash in this environment.”
DoorDash has not yet disclosed how many shares it will sell or how much money it hopes to generate with the offering.
Co-founder and CEO Tony Xu said that as child, after his family immigrated to the U.S. from China, he helped his mom, who had been a doctor in China, by washing dishes at a Chinese restaurant while she served food. “DoorDash exists today to empower those like my Mom who came here with a dream to make it on their own,” he said.
This story was first published on Nov. 13, 2020. It was updated on Nov. 14, 2020, to correct DoorDash’s 2018 revenue. It was $291 million, not $219.
NEW YORK (AP) — By CATHY BUSSEWITZ and TOM KRISHER AP Business Writers
AstraZeneca manufacturing error clouds vaccine study results
A statement describing the error came days after the company and the university described the shots as “highly effective” and made no mention of why some study participants didn’t receive as much vaccine in the first of two shots as expected.
In a surprise, the group of volunteers that got a lower dose seemed to be much better protected than the volunteers who got two full doses. In the low-dose group, AstraZeneca said, the vaccine appeared to be 90% effective. In the group that got two full doses, the vaccine appeared to be 62% effective. Combined, the drugmakers said the vaccine appeared to be 70% effective. But the way in which the results were arrived at and reported by the companies has led to pointed questions from experts.
The partial results announced Monday are from large ongoing studies in the U.K. and Brazil designed to determine the optimal dose of vaccine, as well as examine safety and effectiveness. Multiple combinations and doses were tried in the volunteers. They were compared to others who were given a meningitis vaccine or a saline shot.
Did Researchers Mean to Give a Half Dose?
Before they begin their research, scientists spell out all the steps they are taking, and how they will analyze the results. Any deviation from that protocol can put the results in question.
In a statement Wednesday, Oxford University said some of the vials used in the trial didn’t have the right concentration of vaccine so some volunteers got a half dose. The university said that it discussed the problem with regulators, and agreed to complete the late stage trial with two groups. The manufacturing problem has been corrected, according to the statement.
What About the Results Themselves?
Experts say the relatively small number of people in the low dose group makes it difficult to know if the effectiveness seen in the group is real or a statistical quirk. Some 2,741 people received a half dose of the vaccine followed by a full dose, AstraZeneca said. A total of 8,895 people received two full doses.
Another factor: none of the people in the low-dose group were over 55 years old. Younger people tend to mount a stronger immune response than older people, so it could be that the youth of the participants in the low-dose group is why it looked more effective, not the size of the dose.
Another point of confusion comes from a decision to pool results from two groups of participants who received different dosing levels to reach an average 70% effectiveness, said David Salisbury, and associate fellow of the global health program at the Chatham House think tank.
“You’ve taken two studies for which different doses were used and come up with a composite that doesn’t represent either of the doses,” he said of the figure. “I think many people are having trouble with that.”
Why Would a Smaller First Dose Be More Effective?
Oxford researchers say they aren’t certain and they are working to uncover the reason.
Sarah Gilbert, one of the Oxford scientists leading the research, said the answer is probably related to providing exactly the right amount of vaccine to trigger the best immune response.
“It’s the Goldilocks amount that you want, I think, not too little and not too much. Too much could give you a poor quality response as well,” she said. “So you want just the right amount and it’s a bit hit and miss when you’re trying to go quickly to get that perfect first time.”
What Are the Next Steps?
Details of the trial results will be published in medical journals and provided to U.K. regulators so they can decide whether to authorize distribution of the vaccine. Those reports will include a detailed breakdown that includes demographic and other information about who got sick in each group, and give a more complete picture of how effective the vaccine is.
Moncef Slaoui, who leads the U.S. coronavirus vaccine program Operation Warp Speed, said Tuesday in a call with reporters that U.S. officials are trying to determine what immune response the vaccine produced, and may decide to modify the AstraZeneca study in the U.S. to include a half dose.
“But we want it to be based on data and science,” he said.
EU plans new rules giving Europeans more control of data
The European Union is laying out new standards for data giving Europeans more control over their personal information as it seeks to counter the power of U.S. and Chinese tech companies.
The EU’s executive Commission on Wednesday proposed new rules on the handling of data that would aim to give people, businesses and government bodies the confidence to share their information in a European data market.
The proposed legislation would would spell out how industrial and government data – normally off limits because of intellectual property rights, commercial confidentiality or privacy rights – could be shared to help society or boost the economy. The bloc’s strict privacy rules would still apply, with mechanisms in place to preserve confidentiality or anonymity.
The aim is to drive innovation in areas such as health care or climate change by allowing data to be more easily shared with companies or researchers.
Individuals could choose to donate their data for altruistic reasons – for example, a person with a rare disease providing their health information to medical researchers. Or people could allow access for a fee or use of a service. The new rules could pose a challenge to big tech companies like Google and Facebook that currently make billions in revenue by using data to sell ads and other services.
The proposal, known as the Digital Governance Act, calls for raising trust in data sharing by setting up a new system involving neutral and trustworthy middlemen who act as brokers of pools of data.
Europeans would be able to get more control of their data through “personal data spaces” that have tools and services that let them decide who can access their data and for what purpose.
“The framework offers an alternative model to the current data handling practices offered by big tech platforms,” the EU’s Executive Vice President Margrethe Vestager said at a press briefing in Brussels.
Thierry Breton, the EU’s internal market commissioner, said the regulations would help Europe become the world’s No. 1 “data continent.”
“With the ever-growing role of industrial data in our economy, Europe needs an open yet sovereign Single Market for data,” he said.
LONDON (AP) — By KELVIN CHAN Associated Press.
UK telecom companies face big fines under new security law
Telecom companies in Britain face hefty fines if they don’t comply with strict new security rules under a new law proposed in Parliament on Tuesday that is aimed at blocking high-risk equipment suppliers like China’s Huawei.
The Telecommunications (Security) Bill tightens security requirements for new high speed 5G wireless and fiber optic networks, with the threat of fines of up to either 10% of sales or 100,000 pounds ($134,000) a day for companies that don’t follow the rules.
The draft law paves the way for the U.K. government to formalize Prime Minister Boris Johnson’s decision in July prohibiting Huawei from building Britain’s 5G mobile phone networks because of security concerns.
The British government said it was bringing in the ban – reversing an earlier plan to give Huawei a limited role – because U.S. sanctions made it impossible to ensure the security of its networking gear. Wireless carriers were also ordered to rip out any existing Huawei 5G equipment from their networks by 2027. The Chinese company is one of the flashpoints in a broader global battle between Washington and Beijing over trade and technology.
The new rules are a major step to protecting the U.K. from hostile cyber activity by state actors or criminals, the government said, citing previous cyberattacks attributed to Russia, China, North Korea and Iran.
“This groundbreaking bill will give the U.K. one of the toughest telecoms security regimes in the world and allow us to take the action necessary to protect our networks,” Digital Secretary Oliver Dowden said.
The bill, which needs to be approved by Parliament, spells out tougher security standards for the electronic equipment and software at mobile phone mast sites and in telephone exchanges that handle internet traffic and telephone calls.
Huawei said it was disappointed that the U.K. government was looking to exclude it from the 5G rollout.
“This decision is politically-motivated and not based on a fair evaluation of the risks,” said Vice President Victor Zhang. “It does not serve anyone’s best interests as it would move Britain into the digital slow lane and put at risk the government’s levelling up agenda.”
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