The CEO of Doordash Tony Xu is a new unification of the industry in food delivery

During the depths of the wild epidemic, as restaurants throughout the country face an existential crisis, Doordash CEO Tony Show had an unconventional proposal. He wanted to cut the commissions.

Business officials Keith Yandel that such a move will lead to a tremendous success of profits before the planned public subscription. But what made a convincing case.

“If restaurants do not flourish, we cannot,” Yandel told CNBC in a recent interview. “We need to take a leadership position.”

It ended with a sacrifice of more than $ 100 million of fees, Show He later said.

Since Doordash began on Stanford University campus in 2013, the 40 -year -old CEO has moved in famous business and low food delivery, as it built the Wall Street company today estimated at approximately 90 billion dollars. The arrow appeared as a technical pillow this year, as it jumped by 23 %, while Nasdak is still largely low this year on tariff fears.

After more than four years have passed since the public subscription, clear profits remain minimal. But this does not hinder Xu’s task to become uniform in the industry, using a mixture of new money and debt to feed the acquisition of the acquisition at a time when large technical deals remain rare. Earlier this month, Doordash operated the start of the British foods Smart for about 3.9 billion dollars And restaurant technology company Sevrooms for $ 1.2 billion.

“We did not hand him over to a customer yesterday, it may not be good enough for what we will offer them today,” Show told CNBC.Squawk box“After announcing the deals.

DooDash announced this week Pricing From 2.5 billion dollars of convertible debt, he said that the revenues can be used in part for acquisitions.

The San Francisco -based company has a history with competitors to develop its market share. In 2019, that Caviar bought a food delivery competitor for $ 410 million From the box, now known as the name roadblock. About two years later, Doordash said it was to push 8.1 billion dollars for the international delivery platform. The deal was the latest treatment until this month.

When Doordash entered the food delivery market, he had to face the likes of Grubhub and Sechless, which later joined the forces. This joint entity was bought late last year by the restaurant owner Wondering Group. In 2014, Uber Uber Eats, and he is now the largest doodash competitor in the United States

“It is a very competitive market, and I think merchants have a choice,” Shaw said in an interview with CNBC. “What we focus on is always an attempt to innovate and bring new products to match the increasing standards and expectations of customers.”

Doordash Xu did not make an interview with this story, but it provided a statement on the company’s purchase strategy.

The company said: “We are very difficult to satisfy, and we are very patient, and we realize that, for most companies, the deals do not succeed after it is too late.” “When we see an opportunity to bring value to customers, and expand our potential to enable local economies around the world, and it has a path to long -term returns in the long -term capital, we tend to pay our chips in it.”

The first colleagues and investors highlight the first focus on customers for a large part of Xu’s success. Gokol Rajarram, who joined Doordash, through the acquisition of caviar, described Shu as “the best operating leader in the United States” after that Amazon founder Jeff Bezos.

Restaurants did not look at Doordash globally as an ally. Communication can reach 30 %, which is a Huge cut To a thorn. Many restaurants reluctantly pushed the high fees due to the dominant Doordash stake in the market, which reached estimated 67 %. In 2021, the company presented Three levels From prices, with a 15 % basic option for more prices for prices.

Doordash needs high graphics in order to stay in black. The company’s contribution is earned as a percentage of the total market size hovering less than 5 %.

Classs who have known Shaw for decades say that the pioneer of food delivery has not changed much since the company’s early days.

Yandel said Shaw took advice from his young daughter, who complained about a case of guidance while accompanying him based on the orders of delivering food. All employees, including Xu, are required to complete requests and deal with support calls every year as part of the company’s Wedsh program.

In a part of the country known for its wealthy founders, Show has a completely different reputation.

The first workers remember Xu memories wandering in Green 2001 Honda Accord for team events, or participating in basketball games with the knockout that is referred to as “KNOCKYS”, next to the animal Hospital in Palo Alto, which described Douordsha to its headquarters. Xu also personally agreed to each offer for the first 4000 employees in the company.

Shaw spends many mornings responding to customer service complaints. Classs say that he often falls his children in school, and after they are placed at night, he jumps to calls with international regions. Xu is a fan of Gold State Warriors basketball, but has a soft spot for Chicago Bulls, after spending many years in Illinois. Once or twice a week, you press Shaw in the morning tour, often doing it while traveling to explore different neighborhoods and shops.

Shaw was born in China and moved with his family to Champin, Illinois, in 1989. he He said Stanford’s point of view of the top podcast in 2021 that the experience, and watching his parents, taught him how to “gain your way to better things.”

“His characteristics have become the values ​​of the company,” Alfred Lin, Dodche investor and partner at Venture Sequoia.

Shaw is often attributed to his pioneering spirit to his parents. His mother worked as a doctor in China, and participated in three jobs in the United States for more than a decade, which led to the provision of enough to open a medical clinic in the end. His father worked as a waiter while pursuing a doctorate degree. Shaw said in the podcast that watching his mother gave him a deep understanding of what it took to manage a small company, which was within your reach in the early years of Doordash while he was trying to convert restaurants into clients.

Shaw and his team Yombinator entered the summer of 2013. AirbnbTape and I responded. Each session is crowned with a pilot day in front of some of the largest Silicon Valley investors.

The idea of ​​Doordash Paul buchheit, the Gmail creator and a partner in Y Combinator. But like many other potential investors, Bucheit was skeptical of the economic model.

“You had a talented team from the founders working on what I thought was an idea that had capabilities,” he said. “This is basically the formula to start a good operation.”

On the field, the company failed to attract any adventure companies, but Buchheit later participated as a seed investor.

Soon after the experimental day, Doordash Saar Gur of Charles River Ventures faced. Gour was looking for a food delivery platform to return and was underway for another company when a friend led him to Douordsh.

By the end of their first meeting, they were “ending up with each other,” said Gore.

Lin’s Sequoia initially passed on Doordash after the Y Combinator, but he is in contact with the team. Lynn said he wanted to see the data that showed that the platform could penetrate behind Stanford, Pallo Alto, and keep customers. He ended up leading two institutional tour, and obtained a 20 % stake in Sikoya at the time of the subscription.

Lynn said: “Tony always thought that his company would succeed, or would find a way to succeed.”

Soon after Y Combinator Stint, DooRdash hit an early barrier. After a football match in Stanford, he bombed a rush of his delivery system, which caused tremendous delays, Shu told the CEO of Ycombinator Garry Tan in AnN Interview this year.

The founders have recovered the requests and spent nightclubs, then they led them to customers early the next morning.

Mesti Bolton, the chickpeas involved in Oren, said that Doordash is still taking this approach. The team comes to meet with it every quarter and it is a demo test for new products.

The restaurant, which began in Palu Alto, and since then expanded to half a scale throughout the Gulf region, was one of the first Doordash clients, closing the opportunity to reach more customers outside his small institution that was giving up the door a lot.

“We fell in love with the idea,” Bolton said. “The first thing that encouraged me to want to work with them is a passion for Shaw. It is really one of those people you can rely on.”

Wall Street is now dependent on Xu’s ability to implement large deals, even with the company this month Delivery orders exceeded $ 10 billion All over the world.

Deliveroo, based in London, is a renewed effort by Doordash to expand its presence abroad, after buying Wolt in Finland three years ago.

Cash deal for Seven roomsData platform based in New York City for restaurants and hotels to manage reservation information, take Doordash to a completely new category. Xu CNBC told DooDash is “a multi -product company now operates on a global scale.”

After the acquisitions, which coincided with a disappointing profit report in March, analysts at Piper Sandler reiterated their recommendation on the stock.

They said that one of the causes of anxiety is that “integrating multiple acquisitions at one time may create some noise in the short term.”

He watches: Doordash, CEO of Doordash Tony Xu: Deliveroo & Sevrooms, makes us multi -product on a global scale