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Series A to today: A data-driven look at Airbnb, DoorDash and Instacart

Airbnb, DoorDash and Instacart. All three companies—consumer-focused and technology-based—made headlines during 2020 as their businesses flourished, pandemic or not.

In the midst of a recession and sometimes-queasy investment landscape, Airbnb raised $3.5 billion in an initial public offering that Barron’s referred to as “the most anticipated of the year.” At the offering price of $68 per share, the deal valued Airbnb at some $47 billion.

That same week, DoorDash went public at $102 per share to raise $3.4 billion. Within a day, the price had surged by more than 80%, giving the company a market value of about $59 billion, according to Forbes.

And while Instacart didn’t go public—rumor has it that will happen sometime in 2021—it did close three rounds of funding for a total of $525 million last year. TechCrunch estimates the company’s value at $17.7 billion.

These are young companies, but none can be called an overnight success. Airbnb, which connects homeowners with short-term and long-term tenants, was founded in 2008. Instacart began taking grocery orders and delivering them to consumers in 2012. DoorDash started delivering restaurant meals in 2013.

All of them are leaders of the gig economy, using independent contractors to provide consumer services. At the same time, each relies on a full-time workforce to run the core components of its operations, things like advertising, marketing, customer service and sales.

Common Threads

What’s behind these companies’ success? Innovation, to be sure. And, to a certain degree, timing: Demand for delivery services certainly rose as people stayed home because of COVID-19, which benefitted Instacart and DoorDash. But we became curious about the organizations themselves. By studying their workforce data, what could we learn about how Airbnb, DoorDash and Instacart built their businesses over the years?

Through all stages of growth, the companies emphasized development of their full-time workforce. Examined together, just 6% of their employees are contractors today, a proportion that’s remained remarkably consistent since each business’s founding. The work these employees do has been largely constant, as well: With a few exceptions, the proportions of employees responsible for administration, marketing, sales, and other areas have remained in roughly the same sphere.

All three of these companies have been through an almost complete roll-over of their employees since the early days; 4% of employees during series A, B or C have stayed with DoorDash, followed by 2% with Instacart and 1% with Airbnb.

Another common thread is education. Overall, approximately 60% of Airbnb’s, DoorDash’s and Instacart’s full-time employees hold a Bachelor’s degree, while more than 15% have Master’s degrees. Each business has some doctoral-level employees, who usually joined the company sometime after the organization closed its Series C investment round. Any employees who do not have degrees or whose degrees are not referenced in any publicly available information sources are categorized as ‘Other’.

Education levels at each company (2021)

To get an idea of how each company developed its workforce over the years, let’s look at them individually.

Airbnb

Airbnb has been well-served by its tendency to stick to its knitting, in both building its core business and in running it. From its founding, the company has focused on developing a strong, stable core of full-time employees—today just 3% of its workers are contingent—even while it created a new business model for the hospitality world.

Airbnb’s organizational structure is relatively unchanged, as well. When the company closed its Series A funding round in 2010, administrative staffers—working in areas like Human Resources and Finance—accounted for 27% of its workforce. Today, they make up 24%. While Marketing’s size has declined slightly, from 28% in 2010 to 23% today, the population of R&D specialists increased notably, from 28% to 45%. Airbnb knew how important it was going to be to invest in Marketing from the beginning and to scale up R&D as the user-base grew.

Airbnb – organizational functions from Series A to 2021

In addition, Airbnb prizes experience. Forty-three percent of its employees have worked for at least 12 years, compared to 35% for Instacart and 30% for DoorDash. Just more than a quarter of Airbnb’s workers, 28%, have between two and eight years’ experience. That compares with 37% for DoorDash and 36% for Instacart.

Airbnb – overall employee experience levels Series A to 2021

Where are they hiring from? Today, the majority of Airbnb’s hires have past experience at one of the following companies; Facebook, Google, Microsoft and Apple.

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DoorDash

Like Airbnb, DoorDash has trimmed the size of its administrative ranks. When the company received Series A funding in 2014, 33% of its employees were engaged in HR, finance and similar work. Today, such tasks are handled by 30%.

DoorDash – organizational functions from Series A to 2021

In contrast to Airbnb, however, DoorDash puts a significant emphasis on its sales function. Working as it does with a number of partners and alliances, Airbnb largely fields incoming sales calls. As a result, just 8% of its workforce is involved in sales today. At DoorDash, sales-related roles comprise 21% of the organization. (Sales’s cousins, the marketers, make up 20% of DoorDash’s current workforce and 23% of Airbnb’s.)

There’s an especially interesting contrast between the two in research and development. According to the National Science Foundation, about 20% of technology industry employees are involved in R&D. Although DoorDash’s 29% doesn’t outpace Airbnb’s emphasis, it still makes the firm one of the research leaders in its space. That reflects an effort to grow the R&D workforce, which represented 25% of employees in 2014.

Today, DoorDash shows a trend of hiring employees who have previously worked at Lyft, Uber and Square, amongst other companies.

Instacart

When Instacart closed its Series A round in 2013, more than a third of the organization—34%—was dedicated to research and development. Over the next two years, that proportion dropped to 19%, while the marketing organization grew from 22% to 30%. Today, Marketing staffers make up 21% of Instacart’s staff, while R&D comprises 35%.

Instacart – organizational functions from Series A to 2021

As the R&D workforce contracted, Instacart’s administrative workforce grew from 32% of total headcount to 40%. Today, it’s dropped back to 31%. It may be that those shifts reflect the demands of the company’s growth: A focus on administration was necessary while the company expanded into new markets during 2014 and 2015, while the challenges of the pandemic required the new emphasis on R&D that we see today.

When it comes to hiring preferences, our data shows that Instacart currently goes after employees with experience at Amazon, Uber and Lyft amongst other companies.

Conclusion

Airbnb, DoorDash and Instacart, all new-economy companies that leverage technology to address the needs of a new kind of customer, all designed an organization that mixed education, work experience and skills that reflect their approach to business, whether it’s sales, marketing or research-focused. Each has adjusted its approach as its business evolved. They’ve matched organizational fundamentals with the flexibility necessary to meet market demand. Customers like the result… and so do investors.

If you want to get competitive insights about companies in your space, or beyond, request a demo today.

NOTE: Data is for the US only. ‘Present’ refers to January 2021. All percentages are rounded to the nearest whole number. Our margin of error is estimated to be less than 5%.

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