[I own DoorDash stocks.  This is not investment advice.  Do your own due diligence.]

Studying DoorDash’s 2022 Q1 earnings, released on May 5, 2022, I am convinced that DoorDash is in great shape. 

Many of DoorDash’s metrics are hitting all-time high. Tony Xu, CEO of DoorDash, said on CNBC the day after company earnings: “what we see internally and in the fundamentals is all-time highs in our user base, all-time highs in our DashPass subscriber program, as well as order frequency across all cohorts, as well as increasing profitability in an already profitable business which is our U.S. restaurant business.”

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[This is not investment advice. Do your own due diligence.]

The delivery space has produced a lot of headlines lately. This time, it is about Gopuff.

Gopuff is an Instant Delivery company founded in 2013. It promises delivery in 30 minutes or less and its delivery fee is $1.95 per order.

On March 31, 2022, Bloomberg reported that Gopuff is close to raising $1B and is laying off 3% of its workforce (source link). Combined with information from other news sources, we know the following data points about Gopuff:

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[This is not investment advice. Do your own due diligence.]

I want to write this piece to provide an update to my February 11 post, titled Instant Delivery: Challenges That Cannot Be Overcome. Since that post, several events have transpired, very much in the direction that I predicted.

First, at least two Instant Delivery companies have since folded or near-folded. On March 4, Buyk, an Instant Delivery company operating in New York and Chicago, furloughed ~98% of its employees (source link). Its CEO was quoted saying: “we find funds, we find a buyer or we have to liquidate” (source link).

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[I own DoorDash stocks. This is not investment advice. Do your own due diligence.]

DoorDash is my largest position. In early November 2021, I completely liquidated my DoorDash holdings (see my earlier post). Since then, I have been accumulating DoorDash stocks, buying aggressively in very recent weeks. My cost basis is less than half of the price that I sold DoorDash last November. As I wrote in my year end summary for 2021 (link), “A low cost basis is the mathematical foundation for achieving a high IRR.” In my investing, I intend to achieve a high IRR. Therefore, a low cost basis matters.

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Previous post on February 3, 2022.

[This is not investment advice. Do your own due diligence.]

Instant Delivery is in overdrive. Billions of VC money has been poured into this space since 2020. Unicorns are made, even with less than one year of business history. Some companies are aspiring for a valuation of $40B! As a reference, Uber is trading at ~$70B and DoorDash is at ~$35B.

Despite these dazzling valuation figures, I am increasingly convinced that Instant Delivery, and broadly speaking Grocery Delivery, most likely will NOT work in the U.S. Today’s valuation levels might later be seen as high-water marks, causing permanent capital losses to late coming investors.

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[I own DoorDash stocks. This is not investment advice. Do your own due diligence.]

This is a follow-up piece to my previous post on DoorDash (Sep 2021, link here).

I liquidated my previous DoorDash position in early- and mid- November 2021. Since then, I have been buying DoorDash again.

Summary

DoorDash is the No.1 Food Delivery company in the U.S. Controlling over 50% of the U.S. Food Delivery market, DoorDash has the largest delivery network, the highest work density, and the lowest delivery cost. It is a powerful network that can solve a variety of use cases, ranging from 10-min delivery to 1-day delivery.

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