In 2013, a suburban household near Stanford that wanted dinner delivered could choose from little more than pizza and Chinese food, because the popular ordering sites only passed orders to restaurants that ran their own drivers DD6. Few restaurants did. An investor reviewing the market the next year counted that only 15% of US restaurants delivered DD3. The rest wanted the business and could not afford the delivery staff, and one Palo Alto shop owner kept a booklet of delivery orders she had turned away DD1.
DoorDash
DoorDash delivered for restaurants without drivers, opened the suburbs first and spent a $535 million round on thousands of cities; order volume and a membership then took it to 62.7% of US delivery.
How DoorDash won
Versus Grubhub: Grubhub took orders online and passed them to restaurants that delivered for themselves. DoorDash hired the couriers, opened the suburbs, raised a $535 million round to launch thousands of cities and added a membership that rewarded repeat use DD1 DD6 DD3 DD2.
Arena: Market Conditions Before DoorDash
How each step happened
Step 1 of 5 · 2013–15
Hire the couriers so any restaurant can offer delivery
Tony Xu and his Stanford classmates began by talking to hundreds of local small businesses DD1. One of them, Chloe, ran a one-person macaroon shop in Palo Alto and showed them a booklet of delivery orders she had refused because she had no one to deliver them DD1. In the class project they cut the idea down to three questions. Xu recalls them as whether customers would pay $6 for delivery, whether restaurants would pay a commission of about 15%, and whether drivers would want the work DD10.
The founders were accepted to Y Combinator in the summer of 2013 with a pitch of food delivery for every restaurant in under 45 minutes DD1. The product answered what Chloe could not do. Grubhub and Seamless took the order on the web and routed it to the restaurant, which still had to make the food and deliver it, so they were limited to restaurants willing to run their own delivery DD1. TechCrunch described the difference in July 2013: competitors offered an app for restaurants with their own drivers, while DoorDash hired and managed its own drivers, charged $6 per delivery with no minimum order and could bring food from restaurants that had no couriers DD6. The four founders made the first 200 deliveries themselves DD6.
Alfred Lin saw the trade-off in his March 2014 memo for Sequoia. Grubhub’s approach of passing orders to restaurants that deliver might be a superior business financially, he wrote, but it gave restaurants a less compelling reason to join, and only 15% of restaurants delivered at all DD3. DoorDash had raised $2.4 million and held $1.7 million in net cash. Its gross processing volume was running above $10 million a year at a take rate over 21% DD3.
Rivals Grubhub’s 2014 annual report says most restaurants on its platform still received orders by fax or email, and that it delivered for only a small percentage of them. By the end of 2019 Grubhub provided delivery in more than 440 core-based statistical areas, so the early difference narrowed DD15 DD16.
Step 2 of 5 · 2013–19
Open the suburbs that large-city platforms skipped
Xu chose to build outside the city centers, where a customer cannot take an elevator down and get what they want within minutes DD1. Lin, then a board member, was skeptical at first: everyone else focused on large cities, on the belief that winning the cities made a decent business DD1. The S-1 later gave the commercial reasoning. Suburban and smaller metropolitan markets had grown faster than large ones because merchants and delivery platforms had historically underserved them, which left residents with fewer alternatives and more distance to cover DD2 DD13.
Kamp, a go-to-market writer, reads three economics into that choice: lower customer acquisition cost because rivals were absent, larger orders from families, and higher retention because customers had no alternative to switch to. He notes that repeat customers drove 85% of gross order value in the third quarter of 2020 DD13. Another analyst describes the same pairing of a suburban insight with a unit-economics review that found larger baskets DD12.
Opening a market followed a set routine. Launchers did demographic research, went door to door to recruit the merchants they wanted and finished a launch in six to eight weeks DD13. By October 2020 Edison Trends data cited in the S-1 put DoorDash at 50% of US category dollars and 58% in suburban markets DD2.
Rivals Grubhub’s 2014 annual report describes an aggregator of menus in more than 800 cities that delivered for only a small percentage of restaurants DD15. Edison Trends data in the S-1 put DoorDash at 58% of suburban category dollars in October 2020, measured against Grubhub, Uber Eats, Postmates, Caviar and others combined DD2.
Step 3 of 5 · 2016–19
Raise $535 million and launch thousands of cities
The Series C closed in March 2016 at a per-share price about 5% below the prior round, and investors had started to call food delivery a cash incinerator DD1. Keith Yandell, who joined that year, says Grubhub was maybe eight times DoorDash’s size, Uber was well capitalized and moving quickly, and Postmates was about DoorDash’s size DD1. Lin’s read of the market was that scale was required and room existed for one to three players at most DD1.
A SoftBank term sheet arrived in mid-2017. Sequoia then offered its own, for $190 million. Co-founder Andy Fang asked why DoorDash should not take both checks, and the company did, for $535 million in total DD1. The Series D was announced March 1, 2018, with the SoftBank Vision Fund listed as lead investor DD3. Xu says the money let him step on the gas and take the product DoorDash already knew was best everywhere. The company went from launching about a dozen cities a month to launching 3,000 cities in six to nine months DD1.
Lin says Xu was comfortable raising far less than Uber had because DoorDash acquired twice as many customers per acquisition dollar as its competitors DD1. That separates two explanations for the lead, the money itself and how well each dollar worked. Rivals also had capital, and Lin’s point is that DoorDash needed half the spending per customer DD1. The spending showed in the S-1. In 2019 DoorDash lost $667 million on $885 million of revenue and posted a contribution loss of $200 million, while orders rose from 83 million in 2018 to 263 million and Marketplace GOV from $2.8 billion to $8.0 billion DD2. Sequoia’s Roelof Botha says DoorDash passed both Grubhub and Uber in 2019 to lead the US category DD1. That August it also bought Caviar from Square for $410 million DD18.
Rivals By 2019, each company’s own measures put DoorDash ahead: Marketplace GOV of $8.0 billion against Grubhub’s $5.9 billion of Gross Food Sales, with Grubhub at 22.6 million Active Diners DD2 DD16. Lin says Uber’s war chest dwarfed anything DoorDash raised, and Uber Eats was growing very quickly DD1. Earnest’s card data has Grubhub, including Seamless, at 16.7% heading into the pandemic DD8.
Step 4 of 5 · 2018–21
Sell a membership, then cut restaurant fees during the pandemic
DashPass launched in 2018. Customers pay a flat monthly delivery fee, then $9.99, for unlimited deliveries from eligible merchants DD2. The S-1 says subscribers order more often than non-subscribers, and that by September 30, 2020 over five million consumers were on DashPass DD2. DoorDash designed it to reward its most engaged consumers with savings on delivery and to feature DashPass merchants to them DD2.
The pandemic arrived in March 2020 without a clear sign of whether it would hurt or help, Xu says DD1. DoorDash cut its commissions to restaurants by half, an expense of more than $100 million at a time when it was not profitable, and nearly everyone on the management team was against it DD1. It also spent millions on a national TV campaign called Open for Delivery that promoted competitors alongside itself DD1. Nine-month 2020 orders reached 543 million against 181 million a year earlier, Marketplace GOV $16.5 billion against $5.5 billion, and contribution profit $433 million against a $190 million loss DD2.
The membership kept growing. In its second-quarter 2026 letter, DoorDash says DashPass lowers consumer fees and typically raises order frequency and retention at a lower gross margin percentage, a trade it accepts while the engagement gain lasts. Over the prior twelve months it added more US paid DashPass members than in the previous 24 months combined DD7. At the end of 2025, DashPass, Wolt+ and Deliveroo Plus together had more than 35 million members DD14.
Rivals DoorDash’s pandemic TV campaign promoted its competitors alongside itself, and Lin recalls that all the food delivery companies were making very little money DD1. Uber bought Postmates the same year, and Grubhub entered it with 16.7% of US delivery spending DD8.
Step 5 of 5 · 2019–26
Use scale to widen the lead and carry it abroad
DoorDash listed on December 9, 2020 and ended its first day as a public company worth $72 billion DD5. The S-1 names three reinforcing loops. More merchants bring selection and consumers. Higher order volume attracts more Dashers and allows faster, more efficient fulfillment. Brand affinity then lowers acquisition costs for merchants, consumers and Dashers DD2. The S-1 also says a strong national merchant base lets DoorDash enter a new market and reach a critical mass of merchants and Dashers quickly DD2.
Earnest’s card data shows where those loops had led by November 2024. DoorDash held 62.7% of US delivery, Uber Eats 25% and Grubhub 6.2%. Long-term customer retention was 47% for DoorDash, 29% for Uber Eats and 11% for Grubhub DD8. Just Eat Takeaway transferred Grubhub to Wonder in January 2025 for $650 million, with $500 million of Grubhub’s debt going along DD9. DoorDash used its position to widen the platform. It bought Caviar in 2019 DD18 and acquired Wolt, a deal that closed in June 2022 and that the Sequoia podcast calls very big for a company that does little M&A DD1. In May 2025 it agreed to buy Deliveroo at 180 pence a share, about £2.9 billion in equity value DD17.
The growth carried into profit. In 2025 DoorDash handled 3,172 million orders and $102.0 billion of Marketplace GOV. Revenue was $13.7 billion, GAAP net income $935 million, and contribution profit $4.84 billion, or 4.7% of GOV, up from 3.7% in 2023 DD14. In the second quarter of 2026, orders reached 970 million, up 27%, and Marketplace GOV $33.1 billion, up 36%, with US grocery and retail growing strongly while unit economics improved DD7. The S-1 had already named grocery as a vertical beyond food that DoorDash was starting to serve DD2.
The lead has limits. Uber Eats still held a quarter of US delivery spending and stood level with DoorDash in New York, 34.9% to 37.1% DD8. Lin’s own forecast was room for one to three players, not one DD1.
Rivals In 2019 Grubhub had 22.6 million Active Diners, $5.9 billion of gross food sales, more than 300,000 restaurants and delivery in more than 440 areas DD16. By 2024 its share had fallen to 6.2%, and it sold for $650 million DD8 DD9.
Key dates
- 2013-01DoorDash website launches DD2
- 2013-07TechCrunch describes $6 delivery from restaurants with no drivers of their own DD6
- 2014-03Lin memo: only 15% of restaurants deliver; gross volume above a $10M annual run-rate DD3
- 2016-03Series C closes at a per-share price below the prior round DD1
- 2018DashPass launches DD2
- 2018-03Series D of $535M announced, with the SoftBank Vision Fund listed as lead investor DD3
- 2018-12$2.812B Marketplace GOV Annual results; 83M orders DD2
- 2019DoorDash passes Grubhub and Uber as US category leader DD1
- 2019-08DoorDash agrees to buy Caviar for $410M DD18
- 2019-12$8.039B Marketplace GOV Annual results; 263M orders DD2
- 2020-03Pandemic: commissions cut by half; Open for Delivery campaign follows DD1
- 2020-09$16.485B Marketplace GOV Nine months of 2020; 543M orders; over five million DashPass consumers DD2
- 2020-11S-1 filed; 58% suburban category share cited DD2
- 2020-12DoorDash lists on the NYSE; worth $72B after its first day DD5
- 2022-06Wolt acquisition closes DD1
- 2023-12$66.771B Marketplace GOV Annual results; 2,161M orders DD14
- 2024-11Earnest: DoorDash 62.7%, Uber Eats 25%, Grubhub 6.2% DD8
- 2024-12$80.231B Marketplace GOV Annual results; 2,583M orders DD14
- 2025-01Wonder completes purchase of Grubhub for $650M DD9
- 2025-05DoorDash agrees to acquire Deliveroo at 180 pence a share DD17
- 2025-12$102.018B Marketplace GOV Annual results; 3,172M orders DD14
- 2026-06$33.078B quarterly Marketplace GOV Quarterly results; 970M orders DD7
Sources
Oldest first.
- DD6 Y Combinator-Backed DoorDash Delivers Food Quickly In South Bay. Contemporaneous press
- DD3 DoorDash investment memo (Alfred Lin, March 31, 2014). Investor participant memo
- DD15 Grubhub annual report for fiscal 2014. Rival filing
- DD18 DoorDash is buying Caviar from Square. Press
- DD16 Grubhub annual report for fiscal 2019. Rival filing
- DD2 IPO registration statement (November 13, 2020). Filing
- DD10 DoorDash CEO Tony Xu: Why obsession with detail matters. Founder interview
- DD5 Mastering the Last Mile (Tony Xu). Founder interview
- DD13 How DoorDash built the greatest go-to-market. Analysis
- DD11 How DoorDash won the food delivery wars. Analysis
- DD8 Grubhub's market share fell to 6% before the Wonder acquisition. Market data
- DD9 Wonder finalizes acquisition of Grubhub for $650 million. Press
- DD12 What DoorDash got right (and most startups get wrong). Analysis
- DD17 DoorDash / Deliveroo Rule 2.7 announcement. Company announcement
- DD14 Annual report for fiscal 2025. Filing
- DD7 Second quarter 2026 results. Earnings release
- DD19 DoorDash stock price history. Dated closing market data
- DD20 DoorDash statistics and valuation. Market data
- DD1 Crucible Moments: DoorDash (transcript). Founder interview transcript
- DD4 DoorDash: doing things that don't scale. Analysis