Minorities and women are finally getting a seat at the IPO underwriting table
Robinhood’s highly anticipated IPO last month was led by Wall Street heavy hitters Goldman Sachs and JPMorgan Chase.
But the extensive list of underwriters also included boutique minority-owned firms Ramirez & Co. and Siebert Williams Shank.
Of the 17 firms that helped underwrite the offering, four were owned by minorities, women or military veterans, a category known as MWVBEs.
It’s becoming a trend: 13 of the 25 biggest IPOs of U.S. tech companies in the past year included two or more such firms, according to FactSet.
Tech companies and Wall Street banks, long run and controlled predominantly by white men, came under intense pressure in mid-2020 to improve their diversity after the police murder of George Floyd and the Black Lives Matter protests that followed. Companies made promises to do better, creating social justice philanthropic programs, commiting to more diverse hiring practices, and adding internships for minority candidates, among other moves.
At the time, the IPO market was still mostly closed from the Covid-19 shutdowns and subsequent economic downturn. It slowly reopened in July and August and then flung open in September, when Snowflake held the largest U.S. software offering on record.
In Snowflake’s IPO, the cloud database vendor included four MWVBEs as underwriters — the same four that Robinhood later used. Unity’s share sale, which came right after Snowflake’s, had two of the firms. Airbnb‘s IPO in December included a dozen.
Despite the progress, Cynthia DiBartolo isn’t ready to celebrate.
Over 35 years after entering the finance industry, and a decade after founding investment firm Tigress Financial Partners, DiBartolo has emerged as a fierce advocate for women and minority participation in deal-making. Even though Robinhood added four firms to its roster of underwriters, DiBartolo said that for a company touting its role in democratizing investing, the opportunity was there to make a real splash.
“While we applaud what they did, I think they could’ve brought in more firms to make it more inclusive and make an bigger statement,” DiBartolo said in an interview. “Long before Robinhood existed, long before anyone heard of that company, diverse firms were fighting to bring equality of opportunity to diverse investors. We didn’t have the balance sheet or fire power of a Robinhood.”
In July, Tigress became the first disabled- and woman-owned floor broker to become a member of the New York Stock Exchange. Previously, her firm was among five MWVBEs that served as underwriters for cloud software vendor Monday.com’s IPO.
Now, DiBartolo is working to make sure that the dozens of firms like hers get a regular seat at the table.
DiBartolo created what she calls a diversity questionnaire, or request for information (RFI), for participation in offerings. The objective, she said, is make it easier for companies selling stock, issuing debt or doing share buybacks to vet minority and women-owned firms. American Airlines, she said, has already sent the RFI to firms in the category for future deals.
‘Everyone has reputational risk’
JPMorgan is taking her work a step further, DiBartolo said. The bank is collecting the data from the questionnaires filled out by MWVBEs to build a database that can automate the due diligence process for its clients. DiBartolo said she’s talking to other Wall Street banks about doing something similar.
A JPMorgan spokesperson confirmed the process is underway.
“JPMorgan’s goal is to expand the opportunity for more minority- and women-led firms to be included in debt and equity capital markets issuances,” the company said in an email. “We are building a searchable database based on a streamlined industry RFI which will allow us to evaluate better the strengths and capabilities each firm has to offer our issuer clients.”
The RFI asks firms to fill out details about their principals, the work they’ve done, their expertise and whether there are any legal or regulatory issues that need to be disclosed.
“Everyone has reputational risk,” DiBartolo said. “You want to know who the firms are, who’s behind them, how much of the workforce is diverse, what’s the regulatory history, and is there any pending litigation. These are all questions you should ask.”
DiBartolo is part of other organizations taking different approaches to diversify deal making. At Rev. Jesse Jackson Sr.’s Rainbow PUSH Coalition, an organization fighting for social justice, DiBartolo is chairperson of the steering committee for financial services.
Inside Rainbow PUSH is a 25-year-old group called The Wall Street Project, which advocates for women- and minority-owned businesses in finance. Rebecca Cruz, director of business development at the project, said anytime she reads about a U.S. company that’s raising $100 million or more in an IPO, she sends a letter to the CEO and CFO. In the letter, she encourages the companies to consider including some of the eight minority-owned firms that are members of the organization, providing some detail on what the MWVBEs have accomplished.
Cruz said she follows news clips and press releases about confidential IPO filings so she can reach companies before their prospectuses get published to get the conversations started earlier.
“We’re not pressuring them, we’re saying it’s good for business to include these firms on the transaction,” she said. “The companies that we work with all have proven themselves on Wall Street in transactions. These aren’t fly-by-night firms.”
Many of the firms have been around for decades, managing money for clients, trading, underwriting municipal bond sales and corporate debt deals and, in some cases, doing proprietary research.
While they’re a tiny fraction of the size of the Wall Street giants and are even much smaller than well-known mid-market firms like William Blair, Raymond James and Piper Jaffray, Cruz is out to show companies that it’s not just a good public relations decision to add diversity to their underwriter list. It’s also good business that brings opportunities to reach different classes of investors.
Siebert Williams Shank was formed in a 2019 merger of two firms founded in the 1990s, Siebert Cisneros Shank the Williams Capital Group. The firm has been very active over the past 12 months, helping underwrite IPOs for Robinhood, Krispy Kreme, Marqeta, Oatly, Bumble, Affirm, Airbnb and many others.
Sobani Warner is the head of equities at Siebert Williams Shank and was director of equity at Williams starting in 2000. She said that while the firm, in its various parts, has been underwriting equity deals for two decades, there’s been a clear sea-change in the past year and a half as shareholders and activist groups have been demanding stronger action towards diversity.
“The tech companies along with companies in a variety of industries, perhaps all industries, are seeking to play their part in this really positive transition we’re going through,” Warner said in an interview.
Improving economics
Still, firms like Siebert Williams Shank tend to get a tiny combined sliver of the overall IPO. An analysis of fee data from S&P Global Market Intelligence and CNBC published last year showed that between 2016 and the first half of 2020, MWVBEs each made about $167,620 per IPO and secondary offering, compared to $1.4 million per deal for middle-market firms.
Warner said there has been “positive movement” in deal economics recently, though she didn’t provide specifics. More important than the revenue from any specific offering, she said, is the opportunity to show what these firms can offer a company, so the relationship is there when its time for debt financing, strategic advisory help and even share buybacks.
“This is a good way for us to get to know them and for them to understand our capabilities,” Warner said. “The IPO is perhaps the first transaction we do but the expectation is that the IPO will be the first of many.”
Payment-tech company Marqeta, based in Oakland, California, provides one potential example.
When Marqeta was gearing up for its public market debut earlier this year, the company turned to Lise Buyer, an adviser to pre-IPO companies, for help in navigating the expansive universe of potential underwriters.
Seth Weissman, Marqeta’s chief legal officer, said he and finance chief Tripp Faix asked Buyer for the top 10 minority and women-owned firms. From there, they did some research and narrowed the list to six. In the bakeoff among those firms, Marqeta chose two: Siebert Williams Shank and Seelaus, a woman-owned firm based in New Jersey.
“You can actually reach different investors and give people who otherwise might not get a shot at the opportunity to get in on an IPO,” Weissman said. “What you’re counting on is they don’t bring the same set of investors to the table every single time.”
Weissman said that location played a big role in its choice of Siebert Williams Shank, which is co-headquartered in Oakland. Early in the pandemic, Marqeta launched an initiative to help small businesses in Oakland that were hurt by the Covid-19 shutdowns.
For Seelaus, the Marqeta deal is one of eight billion-dollar-plus tech IPOs the firm has been part of in the past year, according to FactSet. Prior to that, it was only involved in two of that size: Lyft and Peloton, both in 2019.
“We have a much bigger seat at the table in the equity capital market, which is really exiting,” said Annie Seelaus, whose father founded the firm in 1984. She joined in 2009 and was named CEO in 2015.
Seelaus said a confluence of events in 2020 started to turn the tide. The push for diversity and inclusion alongside the broader social justice movement was clearly important, she said. Last week, the SEC approved new Nasdaq rules that will require companies listing on the exchange to meet gender and racial diversity requirement for their boards or explain in writing why they haven’t.
Meanwhile, Seelaus, said, the emergence of special purpose acquisition companies (SPACs) created a whole new market for a different type of IPO.
SPACs raised a record $83.4 billion in 2020 and exceeded that number in the first three months of this year. So far in 2021, they’ve raised $121.2 billion, almost nine times the amount for all of 2019, according to SPAC Research.
In a SPAC, a blank-check company goes public through an IPO and then hunts for a target to buy, eventually turning the acquired business into the operating entity. SPAC IPOs tend to use a different set of underwriters than traditional IPOs and in some cases have handed over much better economics to the alternative firms.
Most notably, in July 2020, Bill Ackman paid a group of six MWVBEs a total of 20% of the underwriting fees for the IPO of Pershing Square Tontine Holdings. He told Yahoo Finance in an interview that the number was 10 to 20 times the normal rate, and said the firms were “going to do the work, you’re going to be part of the team.”
Rainbow PUSH’s Wall Street Project is urging companies to pay MWVBEs at least 5% of the fees, with stock allocation in the 10% to 15% range, said Cruz.
Seelaus wasn’t on the Pershing Square IPO, but her firm has been involved with several others, including the Belong Acquisition Corp. IPO and Freedom Acquisition Corp. 1 offering, both this year. She said one things SPACs are doing better than traditional IPOs is bringing the firms in early in the process.
“We never want to be a box-checking exercise at the last moment,” Seelaus said. “We want to be treated like a real player and have the opportunity to add value to the transaction.”
The trend has still not become ubiquitous.
On the day before Robinhood’s IPO, foreign language learning app Duolingo raised more than $500 million in its share sale. The offering was led by Goldman Sachs and included nine other firms. None were owned by women or minorities.
In an interview after its Nasdaq debut on July 28, Duolingo CEO Luis von Ahn said the roster of underwriters “is not something we concentrated on.”
Von Ahn highlighted the importance of diversity among its workforce and on its board, which is 50% women. But he said the possibility of adding diverse underwriters didn’t come up in discussions.
Correction: A prior version of this story had the incorrect company name in paragraph 13. It’s been updated to say American Airlines.
WATCH: Why Ursula Burns believes the DEI movement is not another false start
Dr. Matthew Willsey working in the operating room.
Courtesy of the University of Michigan
Neurotech startup Paradromics on Monday announced it has implanted its brain-computer interface in a human for the first time.
The procedure took place May 14 at the University of Michigan with a patient who was already undergoing neurosurgery to treat epilepsy. The company’s technology was implanted and removed from the patient’s brain in about 20 minutes during that surgery.
Paradromics said the procedure demonstrated that its system can be safely implanted and record neural activity. It’s a major milestone for the nearly 10-year-old startup, as it marks the beginning of its next chapter as a clinical-stage company.
Once regulators give it the green light, Paradromics plans to kick off a clinical trial later this year that will study the long-term safety and use of its technology in humans.
“We’ve shown in sheep that our device is best in class from a data and longevity standpoint, and now we’ve also shown that it’s compatible with humans,” Paradromics founder and CEO Matt Angle told CNBC in an interview. “That’s really exciting and raises a lot of excitement for our upcoming clinical trial.”
A brain-computer interface, or BCI, is a system that deciphers brain signals and translates them into commands for external technologies. Paradromics’ system is called the Connexus Brain-Computer Interface, and the company says it will initially help patients with severe motor impairments such as paralysis speak through a computer.
Paradromics’ BCI has not been cleared by the U.S. Food and Drug Administration, and it still has a long road ahead before it reaches commercialization.
But for Angle, who founded the company in 2015, the procedure in May was a success, and one that was years in the making.
“You do all of these steps, you validate the hardware, you have this really high degree of rational certainty that things are going to work,” he said, “but still emotionally when it works and when it happens the way you expected it to, it’s still very, very gratifying.”
Though Paradromics’ BCI has not been officially cleared for use by regulators, organizations like the University of Michigan can use new devices for research as long as they can demonstrate that there is not a significant risk to patients.
Dr. Oren Sagher, professor of neurosurgery at the University of Michigan, oversaw the traditional clinical component of the procedure in May. Dr. Matthew Willsey, assistant professor of neurosurgery and biomedical engineering at the University of Michigan, led the research component, including the placement of Paradromics’ device.
BCIs have been studied in academia for decades, and several other startups, including Elon Musk‘s Neuralink, are developing their own systems.
Paradromics’ Connexus Brain-Computer Interface.
Courtesy: Paradromics
“It’s absolutely thrilling,” Willsey said in an interview. “It’s motivating, and this is the kind of thing that helps me get up in the morning and go to work.”
Each company’s BCI is slightly different, but Paradromics is designing a BCI that can record brain activity at the level of individual neurons.
Angle compared this approach to placing microphones inside vs. outside a stadium. Inside a stadium, microphones would capture more detail, such as individual conversations. Outside a stadium, microphones would only capture the roar of the crowd, he said.
Other prominent BCI companies include Synchron, which is backed by Jeff Bezos and Bill Gates, and Precision Neuroscience. Both have implanted their systems in humans.
Paradromics has raised nearly $100 million as of February, according to PitchBook. The company announced a strategic partnership with Saudi Arabia’s Neom in February, but declined to disclose the investment amount.
“The last demonstration stuff has been shown, and we’re really excited about the clinical trial that’s coming up,” Angle said.
WATCH: Inside Paradromics, the Neuralink competitor hoping to commercialize brain implants before the end of the decade
Technology
China’s Leapmotor and Huawei-backed Aito report record high deliveries in May as competition heats up
Stellantis-backed Leapmotor delivered a record 45,067 vehicles in May, reflecting year-on-year growth of 148%.
Cfoto | Future Publishing | Getty Images
Chinese electric carmakers Leapmotor and Aito reported record high deliveries in May, while other startups struggle to catch up as the price war intensifies.
Stellantis-backed Leapmotor delivered a record 45,067 vehicles in May, reflecting year-on-year growth of 148%. On May 15, the automaker launched an updated version of its C10 model, a mid-sized SUV, that retailed from 122,800 yuan ($17,045). Leapmotor said over 13,000 units of the C10 were delivered in May.
And on Sunday, Seres-backed Aito announced on social media that it had delivered 44,454 vehicles, setting a new record. The automaker, which uses Huawei tech, on May 30 officially launched the Maextro S800, an ultra-luxury sedan, with a starting price of 708,000 yuan.
Industry giant BYD maintained its stronghold in the industry, with 376,930 cars sold in May. Total car sales in May rose by 14.1% increase year on year, based on CNBC’s calculations of publicly available figures.
The automaker on May 23 slashed prices on 22 models, bringing the price of its Seagull hatchback down 20% to 55,800 yuan, causing Chinese automakers’ shares to slide.
The EV juggernaut has recently been scrutinized over claims that it had pressured Jinan Qiansheng, one of BYD’s dealers in the eastern province of Shandong, over cash flow. BYD refuted claims in a statement to Chinese media.
The intensifying price war has also sparked fears of a next “Evergrande” — China’s former real estate giant, which defaulted on its debt in 2021.
Xpeng May deliveries dipped to 33,525 vehicles from 35,045 vehicles the previous month. But the company reported a year-on-year growth of 230% and maintained its streak of delivering over 30,000 vehicles for the seventh consecutive month.
The automaker on May 28 officially launched the Mona M03 Max and Plus models, retailing from 129,800 yuan and 119,800 yuan, respectively.
Xiaomi delivered more than 28,000 vehicles in May, mirroring its performance last month.
The smartphone company on May 22 teased a new model of YU7 luxury SUV, which is set to be officially launched in July.
Other startups, however, experienced modest growth in deliveries.
Li Auto delivered 40,856 vehicles in May, representing a year-over-year increase of 16.7%, while Geely-owned Zeekr delivered 18,908 vehicles, indicating a 1.6% year-on-year growth, based on CNBC calculations of publicly available data. That’s despite Zeekr’s attempts to differentiate itself from the competition with its announcement of free driver-assistance technology in March.
Nio‘s May deliveries fell from the previous month, with a total of 23,231 vehicles delivered, reflecting 13.1% year-on-year growth. Onvo, Nio’s family-oriented smart electric vehicle brand, made up 6,281 of total deliveries. That makes May Onvo’s best-performing month so far this year.
Global expansion
Chinese automakers are looking to diversify as competition intensifies. But tariffs imposed by the European Union and the U.S. on Chinese electric vehicles may impede efforts to expand into the West.
Instead, companies may be looking to emerging markets such as those in Africa, Hong Kong-based South China Morning Post reported last week.
BYD on April 24 announced its official entry into Benin, in collaboration with CFAO Mobility.
Tony Xu, co-founder and CEO of DoorDash Inc., smiles during the Wall Street Journal Tech Live conference in Laguna Beach, California, on Oct. 22, 2019.
Martina Albertazzi | Bloomberg | Getty Images
During the depths of the Covid pandemic, with restaurants around the country facing an existential crisis, DoorDash CEO Tony Xu had an unconventional proposal. He wanted to cut commissions.
Chief Business Officer Keith Yandell worried that such a move would result in a massive hit to profits ahead of the company’s planned IPO. But Xu made a persuasive case.
“If restaurants don’t thrive, we cannot,” Yandell told CNBC in a recent interview, recalling Xu’s perspective at the time. “We need to take a leadership position.”
The company ended up sacrificing over $100 million in fees, Xu later said.
Since starting DoorDash on the campus of Stanford University in 2013, the now 40-year-old CEO has navigated the notoriously cutthroat and low-margin business of food delivery, building a company that Wall Street today values at close to $90 billion. The stock has emerged as a tech darling this year, jumping 23%, while the Nasdaq is still down for the year largely on tariff concerns.
More than four years after its IPO, net profits remain slim. But that’s not getting in the way of Xu’s mission to become an industry consolidator, using a combination of cash and new debt to fuel an acquisition spree at a time when big tech deals remain scarce. Earlier this month, DoorDash scooped up British food delivery startup Deliveroo for about $3.9 billion and restaurant technology company SevenRooms for $1.2 billion.
“What we’ve delivered for a customer yesterday probably isn’t good enough for what we will deliver for them today,” Xu told CNBC’s “Squawk Box” after the deals were announced.
This week DoorDash announced the pricing of $2.5 billion in convertible debt, and said the proceeds could be used in part for acquisitions.
Doordash food delivery service in New York City on Feb. 13, 2025.
Danielle DeVries | CNBC
The San Francisco-based company has a history with scooping up competitors to grow market share. In 2019, it bought food delivery competitor Caviar for $410 million from Square, now known as Block. About two years later, DoorDash said it was paying $8.1 billion for international delivery platform Wolt. The deal was its last big transaction until this month.
When DoorDash entered the food delivery market, it had to face off against the likes of GrubHub and Seamless, which later joined forces. That combined entity was bought late last year by restaurant owner Wonder Group. In 2014, Uber launched Uber Eats, which is now DoorDash’s biggest competitor in the U.S.
“It’s a very competitive market, and I think merchants do have choice,” Xu said in the CNBC interview. “What we’re focused on is always trying to innovate and bring new products to match increasing standards and expectations from customers.”
DoorDash didn’t make Xu available for an interview for this story, but provided a statement about the company’s acquisition strategy.
“We’re very picky, very patient, and conscious that, for most companies, deals don’t work out in hindsight,” the company said. “When we see an opportunity that brings value to customers, expands our potential to empower local economies around the world, and has a path to strong long-term returns on capital, we tend to push our chips in.”
Taking on the suburbs
DoorDash differentiated itself early on by cornering suburban markets that had fewer delivery options, while other players attacked city centers. When Covid shut down restaurant dining in early 2020, DoorDash capitalized on the booming demand for deliveries. Revenue more than tripled that year, and grew 69% in 2021.
Colleagues and early investors credit a customer-first focus for much of Xu’s success. Gokul Rajaram, who joined DoorDash through its Caviar acquisition, described Xu as “the best operational leader in the U.S.” after Amazon founder Jeff Bezos.
Restaurants haven’t universally viewed DoorDash as an ally. Commissions can reach as high as 30%, which is a hefty cut to fork over. Many restaurants have reluctantly paid the high fees because of DoorDash’s dominant market share, which reached an estimated 67%. In 2021, the company introduced three tiers of pricing, with a basic option at 15% for more price-sensitive businesses.
DoorDash needs the high fees in order to stay in the black. The company’s contribution profit as a percentage of total marketplace volume hovers below 5%.
Colleagues who have known Xu for decades say the food delivery entrepreneur hasn’t changed much since the early days of the company.
Yandell said Xu once took advice from his young daughter, who complained about a routing issue while accompanying him on food delivery orders. All employees, including Xu, are required to complete orders and handle support calls every year as part of the company’s WeDash program.
In a part of the country known for the pomp of its wealthy founders, Xu has a very different reputation.
Early workers recall memories of Xu pulling up in a dilapidated green 2001 Honda Accord to team events, or participating in company knockout basketball games referred to as “knockys,” next to the animal hospital in Palo Alto, which DoorDash briefly called its headquarters. Xu also personally approved every offer for the company’s first 4,000 employees.
Xu spends many mornings answering customer service complaints. He often drops his kids off at school and, after tucking them in at night, hops on calls with international regions, colleagues say. Xu is an avid Gold State Warriors basketball fan but has a soft spot for the Chicago Bulls, having spent many years in Illinois. Once or twice a week, Xu squeezes in a morning run, and will often do so while traveling to explore different neighborhoods and stores.
Xu was born in China and moved with his family to Champaign, Illinois, in 1989. Growing up, he played basketball and mowed lawns to save up for a Nintendo. He told Stanford’s View From the Top podcast in 2021 that the experience, and watching his parents hustle, taught him how to “earn your way into better things.”
His “characteristics became the company’s values,” said Alfred Lin, an early DoorDash investor and partner at venture firm Sequoia.
Xu often attributes his entrepreneurial spirit to his parents. His mother worked as a doctor in China, and juggled three jobs in the U.S. for over a decade, saving up enough to eventually open a medical clinic. His father worked as a waiter while pursuing a Ph.D. Xu said on the podcast that watching his mom gave him a deep understanding of what it takes to run a small business, which came in handy in DoorDash’s early years as he was trying to convert restaurants into customers.
‘Ten times harder’
Employees say Xu has a reputation for detecting hidden talents among his colleagues. Jessica Lachs, the company’s chief analytics officer, was working as a general manager assisting with DoorDash’s Los Angeles launch when Xu guided her toward her passion for data.
“He believes in leaning into the things you’re really good at, rather than trying to be mediocre at a lot of things,” she said.
After Toby Espinosa, DoorDash’s ads vice president, lost a deal with a major fast food company during his early years at the startup, Xu told him to work “10 times harder” and become an expert in his field. A few years later, the company secured the partnership, Espinosa said.
Grit and struggle defined the early years of DoorDash. The founding team of four managed deliveries around Stanford and Palo Alto though a Google Voice number directed to their cellphones.
DoorDash emerged out of a Stanford business school course known as Startup Garage, taught by Professor Stefanos Zenios. The class requires students to present a business idea, test it, and then pitch it to investors.
Zenios said Xu stood out with his data-driven approach and natural leadership qualities. The team tested two different ideas, including a platform that helped small businesses better track the effectiveness of their marketing, he recalls. Zenios called the idea to target suburban areas a “brilliant insight.”
Xu and his team entered Y Combinator in the summer of 2013. The three-month startup accelerator program is known for spawning companies like Airbnb, Stripe and Reddit. Every session culminates with a demo day in front of some of Silicon Valley’s biggest investors.
The DoorDash idea excited Paul Buchheit, creator of Gmail and a partner at Y Combinator. But like many other potential investors, Buchheit was skeptical about the economic model.
“You had a talented team of founders working on what I thought was an idea that had potential,” he said. “That’s basically the formula for a good startup.”
On pitch day, the company failed to lure any venture firms, but Buchheit later participated as a seed investor.
Shortly after demo day, DoorDash encountered Saar Gur of Charles River Ventures. Gur had been looking for a food delivery platform to back and was conducting due diligence on another company when a friend led him to DoorDash.
By the end of their first meeting, they were “finishing each other’s sentences,” Gur said.
Sequoia’s Lin initially passed on DoorDash after the Y Combinator pitch, but kept in touch with the team. Lin said he wanted to see data that showed the platform could penetrate beyond Stanford and Palo Alto, and retain customers. He ended up leading two institutional rounds, attaining a 20% stake for Sequoia at the time of the IPO.
“Tony always believed that his company would succeed, or they’ll find a way to succeed,” Lin said.
A food delivery messenger is seen in Manhattan.
Luiz C. Ribeiro | New York Daily News | Tribune News Service | Getty Images
Shortly after its Y Combinator stint, DoorDash hit an early roadblock. Following a Stanford football game, a rush of orders bombarded its delivery system causing massive delays, Xu told Y Combinator’s CEO Garry Tan in an interview this year.
The founders refunded the orders and spent the night baking cookies, then driving them to customers early the next morning.
Oren’s Hummus co-owner Mistie Boulton said DoorDash still takes that approach. The team comes to meet with her every quarter and she serves as a beta tester for new products.
The restaurant, which started in Palo Alto and has since expanded to a half-dozen locations across the Bay Area, was one of DoorDash’s first clients, latching onto the opportunity to reach more customers beyond its small establishment that frequently had lines snaking out the door.
“We just fell in love with the idea,” Boulton said. “The number one thing that encouraged and enticed me to want to work with them was Xu’s passion. He really is one of those people that you can count on.”
Wall Street is now counting on Xu’s ability to execute big deals, even with the company having this month surpassed $10 billion in delivery orders worldwide.
The acquisition of Deliveroo, based in London, marks a renewed effort by DoorDash to expand its presence overseas, following the purchase of Finland’s Wolt three years ago.
The cash deal for SevenRooms, a New York City-based data platform for restaurants and hotels to manage booking information, takes DoorDash into an entirely new category. Xu told CNBC that DoorDash is a “multi-product company now that’s operating on a global scale.”
Following the acquisition announcements, which coincided with a disappointing earnings report in March, analysts at Piper Sandler reiterated their hold recommendation on the stock.
One reason for concern, they said, was that “integrating multiple acquisitions at once may create some noise near-term.”
WATCH: DoorDash CEO Tony Xu: Deliveroo & SevenRooms deals make us a multi-product company on a global scale
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