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<ul class="summary-list"><li><keyword id="11931723" type="UNKNOWN" weightage="60" keywordseo="doordash" source="Orion">DoorDash</keyword> shares jumped 21% on Wednesday on a deal to buy Wolt for $8.1 billion. </li><li>Finland-based Wolt operates in 23 countries which will expand DoorDash's global presence. </li></ul><a href="https://markets.businessinsider.com/stocks/dash-stock">DoorDash</a> shares soared Wednesday after the company reached an all-stock deal to buy Wolt, with the €7 billion ($8.1 billion) agreement to buy the Finnish food-delivery company supporting a global expansion. DoorDash separately reported third-quarter revenue that surpassed expectations but a wider loss than anticipated by analysts. The stock price surged as much as 21% to $232 then pared the gain to 13%. The stock had risen about 35% during 2021 ahead of the Wolt announcement. DoorDash equity issued as part of the deal will be valued at $206.45 per share, based on DoorDash's 30-day volume-weighted average price as of November 3. Wolt has "superb consumer loyalty and retention rates," said DoorDash in a <a href="https://ir.doordash.com/news/news-details/2021/DoorDash-Joins-Forces-with-Wolt/default.aspx">Wednesday statement about the transaction</a> that should close in the first half of 2022. Wolt's platform operates in 23 countries under a team of more than 4,000 employees. "By joining forces, we believe we will accelerate our product development, bring greater focus to each of our <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>, and improve the value we provide to consumers, merchants, as well as Dashers and couriers around the world," said DoorDash CEO Tony Xu, in the statement. Xu established DoorDash in 2013 along with then-fellow Stanford University students Andy Fang and Stanley Tang. Wolt, founded in 2014 in Helsinki, offers delivery services from restaurants, grocery and other local stores in its home country, across Europe including Germany and the Czech Republic, and in Israel and Japan. DoorDash also operates in Japan, and the deal will expand its operations beyond the US, Canada, and Australia. DoorDash runs in more than 7,000 cities. Absent from the list of countries is the UK, where rival UberEats operates. "DASH continues to execute very well against an uncertain Pandemic re-opening backdrop, and in Wolt seems to have found an asset that is a cultural fit and designed to be easily portable to new countries" and geographies, said Tom White, senior research analyst at D.A. Davidson, in a note upgrading its price target to $210 from $158.Wolt will bring its team of 4,000 employees to Dash, a move that will help preserve bandwidth for DoorDash's management to keep pursuing opportunities in the core US market, said White. D.A. Davidson remains neutral ratings-wise primarily because of Dash's valuation. The deal should add to DoorDash's growth in gross order value in 2022 and the company foresees proforma combined adjusted EBITDA of up to $500 million next year. The agreement includes a new retention pool of about €500 million reserved for Wolt management and employees.Wolt's co-founder and CEO Miki Kuusi will report to Xu. Meanwhile, DoorDash said third-quarter revenue increased to $1.28 billion from $879 million a year ago, higher than the Refinitiv estimate of $1.18 billion. Its per-share loss was $0.30, wider than expectations of a loss of $0.26 but narrower than the year-ago loss of $0.96 a share. The idea for DoorDash stemmed from a 2012 <a href="https://medium.com/@DoorDash/the-doordash-story-b370c2bb1e5f">meeting with a macaroon store manager</a> in Palo Alto, California, who needed help delivering orders.

DoorDash leaps 21% as $8 billion deal to buy Wolt set to expand global food-delivery operations

<ul class="summary-list"><li>CEO Tony Xu said DoorDash is laying off 1,250 people in a Wednesday memo, Bloomberg reports.</li><li>The company is firing 6% of its workforce in an effort to cut back on operating expenses.</li></ul>DoorDash CEO Tony Xu says the company is cutting costs by laying off 1,250 people.In a <a href="https://www.bloomberg.com/news/articles/2022-11-30/doordash-to-slash-over-1-200-jobs-to-scale-back-rising-costs?leadSource=uverify%20wall">Wednesday memo first viewed by Bloomberg</a>, Xu wrote the company was making an effort to cut back its operating expenses — coming in at $2 billion in the third quarter — and would lay off around 6% of its workforce.The layoffs impacted talent recruiters and sales trainers, as well as workers at Wolt and Bbot, two startups DoorDash recently acquired, according to DoorDash and various LinkedIn posts. "While our business continues to grow fast, given how quickly we hired, our operating expenses — if left unabated — would continue to outgrow our revenue," <a href="https://doordash.news/company/teamupdate/">Xu said in the memo</a>. "We must keep this level of discipline moving forward and act with the hunger, efficiency, and creativity of the younger startup we once were while leading with the responsibility of the market leader we've become."The Covid-19 pandemic served as a big boost for DoorDash and food delivery services like it. <a href="https://www.businessinsider.com/doordash-analysts-are-bullish-on-the-firms-grocery-and-retail-growth-2022-10">Restaurant deliveries were up 95% in September</a> compared to the same month in 2019. DoorDash joins a bevy of restaurant disruptors and food tech companies that have been forced to lay off workers after growing at a rapid pace during the pandemic."Today was a wake-up call for DoorDash, for us to manage our operating expenses more rigorously moving forward," Andy Fang, cofounder and chief technical officer, said in a LinkedIn post. He said he is "still bullish on the business" but that the company had "made mistakes." <a href="https://www.businessinsider.com/layoffs-sweeping-the-us-these-are-the-companies-making-cuts-2022-5">Layoffs</a> are sweeping all tech sectors, from Amazon to <a href="https://www.businessinsider.com/gopuff-layoffs-ultra-fast-delivery-startup-employees-workers-2022-7">Gopuff</a>. The foodtech sector, in particular, has been spiraling as diners' buying habits continue to shift amid record inflation. Hundreds of workers have lost their jobs at restaurant tech startups like Nextbite, Sunday, ChowNow, <a href="https://www.businessinsider.com/lunchbox-lays-off-employees-as-food-tech-startups-face-downturn-2022-7">Lunchbox</a>, Gopuff, and Reef. In his memo, Xu said the company must continue its money-saving efforts to close the gap between its $1.7 billion in revenue and $2 billion in operating costs.The food delivery giant "will continue to reduce our non-headcount operating expenses, but that alone wouldn't close the gap. This hard reality ultimately led me to make this painful decision to reduce our team size," Xu said.The layoffs come in a year when the company made two strategic acquisitions to expand outside the US and boost its services to restaurants. In March, DoorDash bought Bbot, a software company that allows customers to make mobile orders and pay at the table. Now part of DoorDash, the company's tools, such as QR code ordering, are being bundled with DoorDash products geared for restaurants. In June, DoorDash closed its <a href="https://markets.businessinsider.com/news/stocks/doordash-stock-price-wolt-stock-deal-acquisition-earnings-food-delivery-2021-11">acquisition</a> of the Finnish food-delivery company Wolt.VC investment in restaurant and foodservice tech firms, from ghost kitchens to delivery robots, slowed for the fourth consecutive quarter this year, according to PitchBook. Food tech startups raised $2.7 billion in the third quarter, down 63% from last year, and down from $5.6 billion in the previous quarter.The publicly traded DoorDash is not immune to market volatility. In its latest quarter, the company <a href="https://s22.q4cdn.com/280253921/files/doc_financials/2022/q3/DASH-Q3-2022-Financials_FINAL.pdf">reported</a> a $295 million loss, up from $101 million loss for the same quarter last year. The company has been pouring its resources into expanding outside of traditional restaurant delivery over the past year by striking delivery partnerships with supermarkets, convenience stores, and retailers. In September, DoorDash hit a milestone when its <a href="https://doordash.news/merchant/doordash-unveils-new-partnerships-with-top-grocers-and-retailers/">non-restaurant partnerships</a> exceeded 75,000 stores representing a wide range of retailers such as Sephora, Big Lots, PetSmart, Dick's Sporting Goods, Target, Total Wine &amp; More, and Office Depot. Shares in the company have jumped an estimated 2.5% since the layoffs were announced.A DoorDash spokesperson said "no service shutdowns" are tied to the layoff announcement. As stated by Xu, the goal of today's layoffs are to achieve "more efficient growth," the spokesperson said.Are you a DoorDash insider with insight to share? Got a tip? Contact this reporter via email at nluna@insider.com or via Signal encrypted number 714-875-6218.

DoorDash is laying off 1,250 employees and sounding the alarm on the food delivery industry. 'Today was a wake-up call for DoorDash,' CTO said.

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DoorDash leaps 21% as $8 billion deal to buy Wolt set to expand global food-delivery operations

Carla Mozée

DoorDash is laying off 1,250 employees and sounding the alarm on the food delivery industry. 'Today was a wake-up call for DoorDash,' CTO said.

Jordan Hart,Nancy Luna

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