DoorDash ($PRIVATE:DOORDASH) is taking its business model of delivering for the biggest restaurant chains in the US and bringing it to smaller organizations with its Caviar acquisition, which it made Thursday August 1 from payment company Square ($SQ).
The market isn't in love with the move for Square, and its shares dropped more than 10% at Friday's market open, which also followed the payment company's earnings, and included disappointing forward-looking projections. But investors in DoorDash should be estatic, judging by what the alternative data says about each company - and how it highlights a new path toward growth for DoorDash.
Caviar isn't just another ordinary food delivery company and DoorDash's deal also positions it before a completely different kind of market, with precisely the same service. Why else would a company with a footprint so much bigger than its $410 million target spend to buy into areas in which it already has operations? Our map below (use the key in the top-righthand portion of the map to switch between Caviar cities and DoorDash towns) illustrates the scale of the two companies.
Next, zoom in on locations like New York City, and Philadelphia. Caviar operates in about 220 different jurisdictions - but DoorDash operates in more than 4,000, according to alternative data gathered from each and tracked by Thinknum. The difference in scale, measured against how many business partners Caviar and DoorDash have independently, also illustrates the difference between their business models.
As early as it's launch, Caviar's average order size was $80, the company told TechCrunch - that's because it partnered with higher-priced restaurants, including Momofuku. But DoorDash's ordinary order size is likely a bit lower, thanks to the fact it partners with larger companies that tend to produce less expensive meals - like McDonalds ($MCD). DoorDash also has partnerships with chain restaurants including Mickey D's, Starbucks, Taco Bell, KFC and Dunkin' - to name just a handful of many. Consider the map above before you check out the chart below - DoorDash is partner with 7,900 businesses, according to its alternative data; but Caviar, as the chart below shows, has more than 6,400 partners. It is because Caviar isn't partner to many bigger establishments - just smaller restaurants, which is a part of the market DoorDash didn't support, until this morning.
What does it mean? It means that, when people are looking for a reasonably-priced meal from a reliable chain at a low cost, DoorDash has them covered. And, when you're loaded with cash and up for having a fancy meal delivered, it means DoorDash also has you covered. At a time when more Americans are leaning into delivery, and younger consumers are opting out of automobile ownership, DoorDash is positioning itself before consumers as one-stop menu for all things breakfast, lunch, and dinner.
Our final chart tracks a key metric potential IPO investors in DoorDash will find intriguing - the company nearly doubled its headcount in 2019 alone, according to its LinkedIn ($MSFT) Employee Headcount tracking. The company has not reportedly taken steps to file an S-1, but at this rate of growth trajectory, it may not make sense to wait much longer.
About the Data:
Thinknum tracks companies using information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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