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DoorDash CEO Tony Xu has transformed the once-scrappy delivery startup into an industry consolidator worth almost billion DoorDash in recent months bought London-based Deliveroo for billion and booking platform SevenRooms for billion His characteristics became the company s values reported early DoorDash investor and Sequoia partner Alfred Lin During the depths of the Covid pandemic with restaurants around the country facing an existential dilemma DoorDash CEO Tony Xu had an unconventional proposal He required to cut commissions Chief Business Officer Keith Yandell worried that such a move would conclusion in a massive hit to profits ahead of the company s planned IPO But Xu made a persuasive development If restaurants don t thrive we cannot Yandell advised CNBC in a new interview recalling Xu s perspective at the time We need to take a leadership position The company ended up sacrificing over million in fees Xu later mentioned Since starting DoorDash on the campus of Stanford University in the now -year-old CEO has navigated the notoriously cutthroat and low-margin business of food delivery building a company that Wall Street in contemporary times values at close to billion The stock has emerged as a tech darling this year jumping while the Nasdaq is still down for the year largely on tariff concerns More than four years after its IPO net profits remain slim But that s not getting in the way of Xu s mission to become an industry consolidator using a combination of cash and new debt to fuel an acquisition spree at a time when big tech deals remain scarce Earlier this month DoorDash scooped up British food delivery startup Deliveroo for about billion and restaurant tool company SevenRooms for billion What we ve delivered for a customer the preceding day perhaps isn t good enough for what we will deliver for them this day Xu explained CNBC s Squawk Box after the deals were disclosed This week DoorDash revealed the pricing of billion in convertible debt and disclosed the proceeds could be used in part for acquisitions Danielle DeVries CNBCDoordash food delivery amenity in New York City on Feb The San Francisco-based company has a history with scooping up competitors to grow sphere share In it bought food delivery competitor Caviar for million from Square now known as Block About two years later DoorDash reported it was paying billion for international delivery platform Wolt The deal was its last big transaction until this month When DoorDash entered the food delivery territory it had to face off against the likes of GrubHub and Seamless which later joined forces That combined entity was bought late last year by restaurant owner Wonder Group In Uber launched Uber Eats which is now DoorDash s biggest competitor in the U S It s a very competitive sector and I think merchants do have choice Xu declared in the CNBC interview What we re focused on is perpetually trying to innovate and bring new products to match increasing standards and expectations from customers DoorDash didn t make Xu available for an interview for this story but provided a comment about the company s acquisition strategy We re very picky very client and conscious that for the bulk companies deals don t work out in hindsight the company disclosed When we see an opportunity that brings value to customers expands our likely to empower local economies around the world and has a path to strong long-term returns on capital we tend to push our chips in Taking on the suburbs DoorDash differentiated itself early on by cornering suburban markets that had fewer delivery options while other players attacked city centers When Covid shut down restaurant dining in early DoorDash capitalized on the booming demand for deliveries Revenue more than tripled that year and grew in Colleagues and early investors credit a customer-first focus for much of Xu s success Gokul Rajaram who joined DoorDash through its Caviar acquisition described Xu as the best operational leader in the U S after Amazon founder Jeff Bezos Restaurants haven t universally viewed DoorDash as an ally Commissions can reach as high as which is a hefty cut to fork over Multiple restaurants have reluctantly paid the high fees because of DoorDash s dominant territory share which reached an estimated In the company introduced three tiers of pricing with a basic option at for more price-sensitive businesses DoorDash demands the high fees in order to stay in the black The company s contribution profit as a percentage of total marketplace volume hovers below Colleagues who have known Xu for decades say the food delivery entrepreneur hasn t changed much since the early days of the company Yandell announced Xu once took advice from his young daughter who complained about a routing issue while accompanying him on food delivery orders All employees including Xu are required to complete orders and handle patronage calls every year as part of the company s WeDash undertaking In a part of the country known for the pomp of its wealthy founders Xu has a very different reputation Early workers recall memories of Xu pulling up in a dilapidated green Honda Accord to company events or participating in company knockout basketball games referred to as knockys next to the animal hospital in Palo Alto which DoorDash briefly called its headquarters Xu also personally approved every offer for the company s first employees Xu spends various mornings answering customer system complaints He often drops his kids off at school and after tucking them in at night hops on calls with international regions colleagues say Xu is an avid Gold State Warriors basketball fan but has a soft spot for the Chicago Bulls having spent a multitude of years in Illinois Once or twice a week Xu squeezes in a morning run and will often do so while traveling to explore different neighborhoods and stores Xu was born in China and moved with his family to Champaign Illinois in Growing up he played basketball and mowed lawns to save up for a Nintendo He reported Stanford s View From the Top podcast in that the experience and watching his parents hustle taught him how to earn your way into better things His characteristics became the company s values stated Alfred Lin an early DoorDash investor and partner at venture firm Sequoia Xu often attributes his entrepreneurial spirit to his parents His mother worked as a physician in China and juggled three jobs in the U S for over a decade saving up enough to eventually open a physiological clinic His father worked as a waiter while pursuing a Ph D Xu mentioned on the podcast that watching his mom gave him a deep understanding of what it takes to run a small business which came in handy in DoorDash s early years as he was trying to convert restaurants into customers Ten times harder Employees say Xu has a reputation for detecting hidden talents among his colleagues Jessica Lachs the company s chief analytics officer was working as a general manager assisting with DoorDash s Los Angeles launch when Xu guided her toward her passion for input He believes in leaning into the things you re really good at rather than trying to be mediocre at a lot of things she commented After Toby Espinosa DoorDash s ads vice president lost a deal with a major fast food company during his early years at the startup Xu reported him to work times harder and become an expert in his field A scarce years later the company secured the partnership Espinosa commented Grit and struggle defined the early years of DoorDash The founding squad of four managed deliveries around Stanford and Palo Alto though a Google Voice number directed to their cellphones DoorDash emerged out of a Stanford business school discipline known as Startup Garage taught by Professor Stefanos Zenios The class requires students to present a business idea test it and then pitch it to investors Zenios disclosed Xu stood out with his data-driven approach and natural leadership qualities The crew tested two different ideas including a platform that helped small businesses better track the effectiveness of their marketing he recalls Zenios called the idea to target suburban areas a brilliant insight Xu and his squad entered Y Combinator in the summer of The three-month startup accelerator undertaking is known for spawning companies like Airbnb Stripe and Reddit Every session culminates with a demo day in front of chosen of Silicon Valley s biggest investors The DoorDash idea excited Paul Buchheit creator of Gmail and a partner at Y Combinator But like a large number of other prospective investors Buchheit was skeptical about the economic model You had a talented crew of founders working on what I thought was an idea that had expected he disclosed That s basically the formula for a good startup On pitch day the company failed to lure any venture firms but Buchheit later participated as a seed investor Shortly after demo day DoorDash encountered Saar Gur of Charles River Ventures Gur had been looking for a food delivery platform to back and was conducting due diligence on another company when a friend led him to DoorDash By the end of their first meeting they were finishing each other s sentences Gur announced Sequoia s Lin initially passed on DoorDash after the Y Combinator pitch but kept in touch with the unit Lin reported he needed to see details that revealed the platform could penetrate beyond Stanford and Palo Alto and retain customers He ended up leading two institutional rounds attaining a stake for Sequoia at the time of the IPO Tony inevitably concluded that his company would succeed or they ll find a way to succeed Lin revealed Luiz C Ribeiro New York Daily News Tribune News Function Getty ImagesA food delivery messenger is seen in Manhattan Shortly after its Y Combinator stint DoorDash hit an early roadblock Following a Stanford football tournament a rush of orders bombarded its delivery system causing massive delays Xu recounted Y Combinator s CEO Garry Tan in an interview this year The founders refunded the orders and spent the night baking cookies then driving them to customers early the next morning Oren s Hummus co-owner Mistie Boulton declared DoorDash still takes that approach The club comes to meet with her every quarter and she serves as a beta tester for new products The restaurant which started in Palo Alto and has since expanded to a half-dozen locations across the Bay Area was one of DoorDash s first clients latching onto the opportunity to reach more customers beyond its small establishment that frequently had lines snaking out the door We just fell in love with the idea Boulton mentioned The number one thing that encouraged and enticed me to want to work with them was Xu s passion He really is one of those people that you can count on Wall Street is now counting on Xu s ability to execute big deals even with the company having this month surpassed billion delivery orders worldwide The acquisition of Deliveroo based in London marks a renewed effort by DoorDash to expand its presence overseas following the purchase of Finland s Wolt three years ago The cash deal for SevenRooms a New York City-based facts platform for restaurants and hotels to manage booking information takes DoorDash into an entirely new category Xu reported CNBC that DoorDash is a multi-product company now that s operating on a global scale Following the acquisition announcements which coincided with a disappointing earnings analysis in March analysts at Piper Sandler reiterated their hold recommendation on the stock One reason for concern they disclosed was that integrating multiple acquisitions at once may create selected noise near-term Correction A prior version of this story had an incorrect figure for total delivery orders WATCH DoorDash CEO Tony Xu Deliveroo SevenRooms deals make us a multi-product company on a global scale