Liz Gannes says 1 in 3 households in the Bay Area now uses DoorDash.

In what we’ve called the instant gratification economy, a mess of on-demand delivery companies are now sorting themselves out. And Palo Alto, Calif.-based takeout app DoorDash is getting a big vote of confidence with a $40 million Series B funding round led by Kleiner Perkins — that venture capital firm we keep writing about while it’s on trial — along with existing investors Sequoia Capital, Khosla Ventures and Charles River Ventures.

DoorDash, which is about a year and a half old and has 65 employees and many more contract workers, now operates in eight markets, a number CEO Tony Xu said he hoped to double before the end of the year. The company currently only delivers food from restaurants. Xu said he wants to deliver other things, too.

Xu wouldn’t give much in the way of details about how large DoorDash’s business is, but he claimed one in three households in the San Francisco Bay Area has ordered food from the service. He also said every market where the company has launched since the Bay Area has larger order volume.

DoorDash has many competitors, and some of the other startups have already been bought, including Caviar by Square and Eat24 by Yelp. Compared to others in the space, DoorDash has developed a reputation for smarts around how to manage the many factors that make a delivery reliable — how long it takes to prepare food, how many people to keep on call based on irregular demand, which “dasher” is best to pick up an order and deliver it, what mode of transportation the dasher should take, etc.

“The technology in this company was enormously appealing,” said Kleiner Perkins’ John Doerr in a phone interview about the deal. “Just the number of Stanford machine-learning experts they could hire — machine-learning people go crazy for this problem. It’s way more complicated than people realize.”

What’s the big deal here? Is there really a huge company to be built around a takeout service? Yes, Doerr said — the delivery market is already something like $70 billion in the U.S., according to the IPO filing of GrubHub, a 10-year-old competitor that recently went public. “I think the opportunity is to be the logistics platform for last-mile delivery.”

So if that’s the long-term goal, how will DoorDash match up against Uber and Amazon? “We shouldn’t confuse last-mile delivery with urban mobility,” Doerr said of Uber. He declined comment on Amazon, where he was a long-time member of the board of directors.

There is a LOT of competition in this space.

The funding will allow DoorDash to better compete with Bay Area rivals in the growing food-delivery service industry, including Sprig, Spoonrocket, Munchery, Caviar. Delivery startup Postmates completed a $35 million Series C round in February.

Additional competition may come in the form of Instacart. In January, the grocery-delivery startup raised $220 million and it's estimated that the company is currently valued near $2 billion. At the time, Instacart announced plans to move beyond just grocery delivery and into other goods. Amazon also launched one-hour delivery service in New York City for $7 and will deliver in two hours for free.

Online and mobile food and grocery startups saw $688 million in funding in the third quarter of 2014, according to CB Insights. Over the previous four quarters, companies in the food delivery space raised a total of $1.56 billion across 107 deals."

Source: 

http://bizjournals.com/sanjose/blog/techflash/2015/03/doordash-raises-35m-to-better-compete-with.html

Fortune does not report how many active users DoorDash has.

Perhaps it’s time to rename the popular startup DoerrDash...

DoorDash, an on-demand delivery service for local restaurants, has raised around $35 million in new VC funding at a valuation of nearly $600 million, Fortune has learned.

Kleiner Perkins Caufield & Byers led the round, with partner John Doerr to join the DoorDash board of directors. (We’ll presume that Doerr is taking the board seat because of his personal belief in the business, and not simply because of the delicious name symmetry.)

DoorDash previously raised nearly $20 million, including a $17 million Series B round last May from Sequoia Capital, CRV, Khosla Ventures, Pejman Mar Ventures and Ted Zagat.

The Silicon Valley-based company currently operates in nine markets, including Chicago and three on the East Coast (Boston, Brooklyn and Washington, D.C.).

DoorDash did a $4 million Series A seed round in 2013 led by YCombinator.