- Business Insider spoke to Xu shortly after shares began trading on the New York Stock exchange at $182 per share, a whopping 78% pop on its first day as a public company.
- He told us why the customers who signed onto the platform during the pandemic will stay in a post-vaccine world.
- A newly minted billionaire, Xu said he doesn't have plans to buy anything extravagant. He's also staying put in San Francisco instead of moving to Miami or Austin like many of his CEO peers.
- Reflecting back, Xu said he would tell his younger self: 'chase customers and excellence, not the scoreboard.'
- Visit Business Insider's homepage for more stories.
Just a few years ago, DoorDash was struggling to find investors, burning cash, and jostling for a spot in the competitive food delivery space along with Uber Eats, Postmates, GrubHub, and others. None of this derailed CEO Tony Xu who stayed focused on his mission and steered the ship in the right direction.
And on Wednesday, he was rewarded with one of the largest blockbuster IPOs of the year. DoorDash raised $3.4 billion for its company and shares opened 78% above the IPO price.
Business Insider spoke with Xu on this spectacular opening day.
"What I learned in the pandemic is that once consumers form habits, they're hard to change," Xu said. "Delivery has become an additive because we eat 20 to 25 times a week so it's not all going to be one method."
Despite the struggles of 2017, by the end of 2019 DoorDash had risen to the top of the U.S. food delivery market and raised billions of dollars from top tier investors with deep pockets, including Softbank Group, Sequoia Capital, Kleiner Perkins and Singapore's sovereign wealth fund. The San Francisco-based company also weighed a few options, including a direct stock listing instead of a traditional IPO, and a potential merger with another food delivery startup.
When COVID-19 hit the United States, Xu saw more opportunities unfold before him. In April, the company started delivering toilet paper and other grocery items from convenience stores. It also created a supply chain from scratch, distributing masks and hand sanitizers to its couriers.
Xu said he believes the customers that signed onto the platform during the pandemic will continue to rely on the company in a post-vaccine world.
Given the sharp jump in share price, we asked how he decided on the initial $102 per share and if he could have, or should have, priced higher.
"As a public company, anyone can have an opinion that they can voice with their wallets in terms of our stock price and our valuation," said Xu. "For me, it's about focusing on what we can control. And during the IPO process, it was about setting a price that I felt was reflective of our fundamentals."
But he gracefully acknowledged what IPO-process naysayers like Bill Gurley are thinking, that DoorDash could have picked a higher price and raised even more money for the company. "We didn't take every last dollar," he added.
Inspired by his mother
The company began, like many Silicon Valley startups, on Stanford University's campus seven years ago. The original idea was simple. Take students' orders over the phone for restaurants that didn't deliver and make the deliveries themselves. In its earliest days, all DoorDash employees, including Xu, were responsible for picking up and delivering everything from Thai food to hummus.
Xu says he was inspired by his mother, a Chinese immigrant who waited tables until she saved up enough to open up her own small business.
"I think she's very proud that I didn't have to defer my life and my goals," said Xu. "I owe a lot of my success to her."
Reflecting back, Xu said he would tell his younger self to "chase customers and excellence, not the scoreboard."
Newly minted billionaire
With today's market debut, Xu also joined the founder billionaire club with his full potential stake in DoorDash now worth more than $2.7 billion.
But he doesn't have plans to start buying things, not even a new car, anytime soon.
"I'm more interested in experiences," he said. "So, I wish I could be celebrating with our team at a restaurant today."
However, unlike some of his peers who have moved out of expensive Silicon Valley to places like Austin and Miami, Xu plans to stay put in San Francisco. His family is here, and he still believes in the power of the Silicon Valley ecosystem.
"I do think it's a moment for elected officials and policymakers to take note," he said, referring to the Silicon Valley exodus. "This can go a lot bigger in not a great direction if we don't take stock of why some of these things are happening."
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