DoorDash Raises $2.4M To Improve Food Delivery

DoorDash has raised a $2.4 million round led by Khosla Ventures’ Keith Rabois and Charles River Ventures’ Saar Gur. SV Angel's David Lee, YC partner Paul Buchheit, Benchmark co-founder Andy Rachleff, angel investor Russell Siegelman, and Pejman Nozad's new fund Pejman Mar Ventures were also in on the round. Terms of the deal were not disclosed. The company, which was in Y Combinator’s summer 2013 batch, delivers food from 70 restaurants in Palo Alto and Mountain View to nearby towns for $6. The DoorDash team tells me they will use the capital to grow the engineering and operations teams. The space is very crowded, even just in Palo Alto and Mountain View. Fluc, another startup that delivers food in the area for a $6 charge, announced last week that it is expanding to 140 restaurants, including service in San Francisco. Fluc told TechCrunch that its order volume and revenue were growing by 20 percent weekly. While declining to get into specific numbers, DoorDash co-founder Andy Fang claims that DoorDash’s order volume and revenue are growing faster on a weekly basis. He explains that by partnering with restaurants, DoorDash can shave up to 20% off delivery time and keep prices low for the customer (although he admitted that some prices on DoorDash are higher than those in the actual restaurant). “We view ourselves as a logistics company,” Fang tells me. “Our goal is to deliver faster than any service out there.” Fang argued that DoorDash’s biggest competitor isn’t Fluc or another food delivery startup, but non-consumption, or potential customers who don’t know about DoorDash and are just cooking or ordering Pizza. However, the company isn't worried much about marketing and is relying a lot on word of mouth growth. This past Saturday, a friend of mine was trying to order food as we watched a glorious day of college football, and we started talking about DoorDash and Fluc. He went to download the app to try it out, and got Door Dash, “a fun running game full of adrenaline rush that tickles the confused nerve of your brain.” He did not enjoy the game. The DoorDash team says they plan to roll out an iOS app, pictured above, soon.
Billy Gallagher

Billy Gallagher is a Writer at Gigabuzz, focused on covering early-stage startups, especially those with a technology focus and great perks.

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