Let me correct a bit of a misconception floating around out there. When Klarna--famous for "pay in 4 installments!"--announced yesterday it was partnering with Doordash, the guffaws were instant. Preying on people who can't afford a Chipotle burrito! was a typical take. Big Short "this is the sign of a bubble" memes were everywhere.
But friends, Doordash has come a long way. It's not just for high schoolers or finance bros to get their meal fixes anymore. I used it three times in a row last night--first for pregnancy food cravings (spicy rigatoni), then for $150 worth of groceries, and then for a quick re-up on children's Vick's and Tylenol from CVS as my kids' fevers took a turn for the worse.
Each time it was fast, easy, and reliable. Truly, a lifesaver. I used to never get groceries delivered because it was too costly and cumbersome. Doordash has made it easy, and reasonably inexpensive. I can't say I was surprised when shares of rival Instacart sank 12% after their last earnings report--their worst session yet since going public in a lackluster IPO eighteen months ago.
Not just that, but Doordash is up 13% this year in a very difficult tape. (The S&P 500, I don't need to remind anyone, is down nearly 5% since January 1.) Instacart is down 7%.
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I was out at dinner the other night with a super successful CEO. Somehow or other, the topic of Doordash came up. "I think I'm their biggest user," she chuckled under her breath. "No, no, I am," I insisted. Naturally, we pulled out our phones to see who was right. She won our faceoff, with several dozen orders (and a handful more than I had) in the previous two weeks.
So of course Klarna is partnering with them. It's not just CEOs who are power users. Doordash is becoming a staple of everyday life. Heck, Home Depot and Dollar General are now on the app! Giving consumers the option to spread out the cost of their purchases--especially weekly grocery orders--is no different than offering that checkout option at Walmart, Target, or anywhere else.
Has Doordash won the battle for delivery app supremacy? It's still a fierce one, with tough competitors. Instacart, which started as groceries-only, added restaurant delivery last year, powered by Uber Eats. On its earnings call last month, the company said that is "creating more stickiness of the overall product," and raising usage of Instacart Plus. And shares of Uber are up a juicy 23% year-to-date.
Money Report
I just hope that Doordash stays as useful and relatively inexpensive in the future as it is now. We all know how much costlier Uber got after it had to become a real publicly traded company, and not just a hot venture-capital funded start-up. But Doordash has been public for more than four years now, and just posted its first full-year profit.
And on that note, I think my team just Doordashed lunch.
See you at 1 p.m!
Kelly
