United States securities and exchange commission logo
August 7, 2020
Tony Xu
Chief Executive Officer and Director
DoorDash Inc
303 2nd Street, South Tower, 8th Floor
San Francisco, California 94107
Re: DoorDash Inc
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted July 10,
2020
CIK No. 0001792789
Dear Mr. Xu:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 1 to Draft Registration Statement on Form S-1, submitted
July 10, 2020
Risk Factors
Risks Related to Our Business
"Systems failures and resulting interruptions in the availability of our
website . . .", page 29
1. We note your response
to comment 4, and your amended disclosure on page 29; however,
your disclosure is not
completely responsive to our comment. Please describe the
circumstances of the
past events described in this risk factor, specifically those that
occurred in 2018 and
2019, which resulted in credits of less than $1 million and $12
million to consumers
using your platform, respectively.
"We primarily rely on Amazon Web Services to deliver our services . .
..", page 51
Tony Xu
DoorDash Inc
August 7, 2020
Page 2
2. We note your response to comment 8, including your assertion that the
AWS agreement is
not material to you because, "even though the Company s platform is
entirely in the cloud,
the Company believes that it could transition to one or more
alternative cloud
infrastructure providers on commercially reasonable terms. While
transitioning the cloud
infrastructure currently hosted by AWS to alternative providers could
potentially be
disruptive and the Company may incur significant costs for a short
period, it would not
cause substantial harm to the Company s business, financial
condition, or results of
operations over the longer term." To provide context for investors
regarding the
importance of your relationship with AWS, please amend your disclosure
to include the
substance of your response, quoted above. Alternatively, please file
the AWS
agreement as an exhibit to your filing.
Risks Related to Ownership of Our Common Stock
"Our amended and restated bylaws will designate a state or federal court . .
..", page 70
3. We note your disclosure that the exclusive forum provision in your
charter will provide
that the federal district courts of the United States of America will
be the exclusive forum
for resolving any complaint asserting a cause of action under the
Securities Act. Please
disclose the extent to which your exclusive forum provision will apply
to Exchange Act
claims. Further, because a similar exclusive forum provision appears
in your current
certificate of incorporation, please amend your disclosure to state,
if true, that this
provision will also appear in your amended and restated charter, and
not solely your
bylaws.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Attractive Cohort Trends, page 97
4. We note your presentation of contribution margin as a percentage of
Marketplace GOV by
cohort. Please expand your disclosure to explain the limitations
regarding its usefulness,
including that it is not indicative of overall results for the
company, it is not a financial
measure of profitability and is not intended to be used as a proxy for
the profitability of
the business, nor does it imply profitability. Additionally, please
disclose that it is not an
indicator of past or future financial performance.
5. Here and throughout your filing, you refer to your "category-leading
spend retention," and
you define "spend retention" in footnote 9 on to the graphic on page 4
of your filing.
FirstName LastNameTony Xu
Please amend your filing to more prominently disclose the definition of
spend retention,
Comapany NameDoorDash
including, Incwhere you discuss spend retention as it relates
to the historical
specifically,
Augustperformance
7, 2020 Pageof2 your cohorts.
FirstName LastName
Tony Xu
FirstName LastNameTony Xu
DoorDash Inc
Comapany
August NameDoorDash Inc
7, 2020
August
Page 3 7, 2020 Page 3
FirstName LastName
Our historical consumer cohorts exhibit repeat behavior, which drives an
increasing proportion
of our Marketplace GOV, page 97
6. We note your disclosure in footnote 44 that your 2016 & Prior cohort
is comprised of all
consumers who placed their first order on your platform on or before
December 31, 2016.
Considering that you were founded in 2013, the 2016 cohort appears to
include up to
four years of consumers, while subsequent cohorts include only one
year of consumers.
Therefore, please disclose that results for this cohort are not
comparable to the following
cohorts, and tell us why you believe it is appropriate to include this
cohort in your cohort
presentation.
7. We note your disclosure that the graphic on page 98 "reflects the
indexed growth in
annual Marketplace GOV by consumer cohort." However, the indexed
growth in annual
Market GOV for Y2, Y3, and Y4 is unclear from the graphic. Please
revise your graphic
or provide additional narrative disclosure explaining what you are
trying to show for each
cohort.
8. You disclose that "[t]he increasing proportion of Marketplace GOV from
existing
consumers improves [y]our operating leverage as the sales and
marketing and promotions
spend associated with [y]our existing consumers is significantly lower
than the spend
associated with new consumers." While your narrative disclosure and
graphics in this
section show Marketplace GOV by cohort, Marketplace GOV from existing
and new
consumers, and Contribution Profit (Loss) as a percentage of
Marketplace GOV, we were
unable to find disclosure quantifying your sales and marketing and
promotions spend
associated with your new and existing customers, and with each cohort.
Considering your
disclosure throughout this section that your cohort presentation shows
that you have been
able to retain and grow consumer demand while normalizing sales and
marketing and
promotions spend, please provide narrative disclosure and/or graphic
disclosure
quantifying your sales and marketing and promotions spend per cohort
and for new and
existing customers.
Factors Affecting Our Performance
Cost-effectively attract consumers and increase their engagement, page 100
9. We note your response to comment 16, and your amended disclosure in
the chart on page
96, where you discuss the definition of Adjusted EBITDA. Please amend
your filing to
more prominently disclose the quantified promotional spend, including
where you discuss
your reliance on incentives and promotional spend.
10. We note your response to comment 17 and your amended disclosure
throughout the
filing. You disclose that "[c]onsumers that subscribe to DashPass have
higher order
frequency relative to non-subscribers," but your response letter
states that "[t]hese
subscribers could be early adopters and their order frequency may not
be representative of
future subscriber order frequency as DashPass adoption continues to
grow," and "the
average order frequency for DashPass subscribers fluctuates from
period to period
Tony Xu
DoorDash Inc
August 7, 2020
Page 4
depending on a number of factors, including the number of non-paying
trial users, who
generally have lower order frequency." Further, your response letter
states that "the
Company believes that providing order frequency for DashPass
subscribers could be
potentially misleading to investors and would not meaningfully add to
an investor s
understanding of the Company s business." In this regard, please
remove the disclosure
about order frequency from your filing, if it is, in fact, misleading.
Alternatively, please
amend your disclosure in this section to include the substance of your
response, quoted
above, so investors will be informed of the limitations on your
statement that DashPass
subscribers have higher order frequency relative to non-subscribers,
or quantify the order
frequency for each of DashPass and non DashPass consumers.
Comparison of the Years Ended December 31, 2018 and 2019, page 108
11. Please expand your results of operations discussion to quantify the
impact of each factor
identified as causing changes in results between periods. For example,
we note that
operations and support increased as a result of increases in
onboarding costs, personnel-
related compensation expenses, and allocated overhead. Please quantify
the impact of
each factor attributing to the increase here, and throughout your
comparison discussion in
accordance with Item 303(a)(3)(iii) of Regulation S-K and Section
III.D of SEC Release
No. 33-6835.
Sales and Marketing, page 109
12. Please quantify the amount of Dasher referrals and Consumer referrals
reflected as sales
and marketing expenses in the consolidated statements of operations.
Our Business, page 129
13. We note your response to comment 19, including that "[w]hile there are
some differences
in calculating off-premise spend and Marketplace GOV, the Company
believes that such
differences represent a relatively minor portion of the calculation of
each measure, and as
such, Marketplace GOV and off-premise spend are generally consistent
and comparable
measures." Please amend your filing to clarify for investors that
Marketplace GOV and
off-premise spend are calculated differently, and to explain why the
company believes
these metrics are comparable.
Contribution Profit (Loss), page 213
14. We note in your response to comments 25 and 26 that you believe revenue
is the most
directly comparable GAAP measure to Contribution Profit (Loss). Since
revenue does not
FirstName LastNameTony Xu
contemplate costs or expenses, it is not the most directly comparable
GAAP measure.
Comapany NameDoorDash
Please reconcile yourInc
Contribution Profit (Loss) non-GAAP measure to a
GAAP
Augustcalculated Gross
7, 2020 Page 4 Profit (Loss).
FirstName LastName
Tony Xu
FirstName LastNameTony Xu
DoorDash Inc
Comapany
August NameDoorDash Inc
7, 2020
August
Page 5 7, 2020 Page 5
FirstName LastName
General
15. Please tell us whether you commissioned the Edison Trends research
referred to
throughout your filing. If so, please provide the consent required by
Rule 436 and Section
7 of the Securities Act.
You may contact James Giugliano at (202) 551-3319 or Theresa Brillant
at (202) 551-
3307 if you have questions regarding comments on the financial statements and
related matters.
Please contact Katherine Bagley at (202) 551-2545 or Lilyanna Peyser at (202)
551- 3222 with
any other questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: Rezwan D. Pavri