Dive Brief:

• DoorDash may opt for a direct stock listing next year instead of an initial public offering, according to Bloomberg. 
• Such a move would allow the food delivery company to jump into the public markets without the investor pressures that come with an IPO. 
• The company wouldn't raise money through shares, but its existing shareholders would still be able to sell their stock. Management expects to raise money by other means, a person close to the matter told Bloomberg. 

Dive Insight:

This report is just the latest in a string of food delivery rumors. In August, a report about Postmates filing for an impending initial public offering began to surface, but it has yet to officially enter the public arena. Uber, Grubhub and Waitr are already on the market. In August, sources told Bloomberg DoorDash could go public as early as next year. And it has plenty of money to do so, with $2 billion raised and a valuation of about $13 billion. And investors keep backing the company, with accounts advised by T. Rose Price Group being the latest to invest $100 million.

In a crowded space, DoorDash has quite an allure, growing at a 280% clip year-over-year. It also partners with 90% of the top 100 restaurant chains and expanded into 50 states earlier this year. The company has grabbed the most market share in foodservice delivery, followed by Uber Eats and Grubhub, both of which are public.  

The company is also diversifying its portfolio in an attempt to differentiate, unveiling a to-go-only kitchen in the San Francisco area last month, for example, that has secured a partnership with heavy-hitter Chick-fil-A, and partnering with McDonald's for an aggressive Big Mac campaign to boost awareness. It is also leaning heavily into autonomous delivery, which is on a steep growth trajectory. The delivery robot market is already expected to jump from $11.9 million in 2018 to $34 million by 2024, according to a MarketsandMarkets report, and could provide a more efficient way to deliver small orders or send meals short distances without needing a courier.  

If DoorDash takes a direct listing approach, it wouldn't be the first tech company to do so — Slack and Spotify both followed this route — though the move remains relatively rare. By doing this, companies benefit from saving on bank fees, but miss the opportunity to generate additional shareholder funding, according to Business Insider. Some venture capitalists have speculated that this could become more common, as tech startups with high valuations and brand recognition may not need the initial cash and pomp and circumstance to get off the ground.

In the case of Slack, for example, the company was the fastest startup to reach a $1 billion valuation. It's also worth noting that employees, in addition to early investors, may benefit from a direct listing, as they can sell their shares without waiting through the IPO lockup period, which can last up to 180 days, according to Business Insider.

Food delivery companies have come under significant scrutiny this year for not generating a profit.The risks in the category were clearly outlined in Grubhub CEO Matt Maloney's letter to shareholders, which stated: "The easy wins in the market are disappearing a little more quickly than we thought." After that letter was sent, the company's stock fell 43% the next day, and many investors downgraded the company's rating.

Regardless of how a company enters the public market, without a profit, investors seeking a return could lose interest.