DoorDash’s three Chinese-American founders, Xu Xun (left), Stanley Tang (center) and Andy Fang (right), became billionaires as a result of the company’s IPO. (Taken from Twitter)
Three Chinese students at Stanford University, Xun Xu, Andy Fang and Stanley Tang, were inspired by a dessert store in Palo Alto, California, seven years ago: the day the owner showed them a stack of orders she couldn’t take because the demand wasn’t high enough for her to afford a full-time delivery person, and she couldn’t possibly deliver them herself. The three college students heard many such stories, and they came to understand how technology could be used to help small businesses expand their operations.
They decided to create a very basic Web site with menus from several local restaurants to test the demand for delivery,” Stanley Tang says. “It was really super simple and hard to read, and frankly, we didn’t have much hope. But all of a sudden, people were calling to order Thai food,” says Stanley Tang.
Now DoorDash, the food delivery company they founded, has gone public, raising $3.37 billion in Tuesday’s IPO by offering 33 million shares at $102 each, with shares immediately jumping to $189.10 on Wednesday, 86 percent above the offering price. The three students became billionaires.
According to the Bloomberg Billionaires Index, the three founders’ holdings are worth $2.5 billion to $2.8 billion, respectively, based on Wednesday’s opening price. Xu Xun holds a total of 69 percent of the voting rights to control the company through Class B shares, the filing shows.
Other investors who benefited from the IPO include Sequoia Capital, SoftBank’s Vision Fund, and Yuri Milner’s DST Global, which valued DoorDash at $16 billion in June, and now has a market capitalization of more than $71 billion on a fully diluted basis.
Back in the day, the founders personally fulfilled their first order of Thai food delivery and had to juggle a fast-growing business with their busy school schedules.
We had to go to class and then deliver after class,” Stanley Tang said. We were customer service and sometimes had to answer the phone while the professor was lecturing. We would go to University Drive during the afternoon hours to hand out flyers and try to promote DoorDash,” said Stanley Tang.
They still encourage all employees to deliver, participate in customer service or other front desk tasks at least once a month.
DoorDash’s business has grown rapidly, expanding across the U.S. and into Canada and Australia, with an unexpected boost from this year’s New Crown (a Chinese Communist virus) epidemic, which has seen people not going into restaurants and ordering food on their smartphones instead. In the nine months ended Sept. 30, the company posted total revenue of $1.9 billion, well above the $587 million it earned in the same period last year.
DoorDash said it has cut business commissions and increased commissions for delivery workers in order to support merchants and delivery workers during the outbreak. But some merchants said they were squeezed by DoorDash during the outbreak because they were unable to provide in-store dining services properly.
DoorDash’s business grew so fast that the three students became billionaires when it went IPO on Tuesday.
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