Financial Metrics at DelishGo

By Anne Beyer, Rob Siegel, Jose Ignacio Garcia Suarez
2024 | Case No. E754 | Length 13 pgs.

DelishGo, a Los Angeles-based unicorn founded in 2019, has experienced rapid growth and expansion, raising $150 million in a 2023 funding round, resulting in a $1 billion post-money valuation. The company operates a multi-sided online marketplace for grocery delivery, leveraging a technology-driven approach to balance supply and demand through machine learning. Despite initial success, DelishGo’s aggressive expansion and marketing efforts have led to a significant increase in its burn rate, now exceeding $10 million per month, and a deterioration in unit economics.

As the leadership team prepares for an end-of-year board meeting, they face the challenge of presenting a clear financial status and a strategic path to profitability. Key financial metrics, such as gross margin and contribution margin, need to be understood and improved. The case explores DelishGo’s complex ecosystem, which includes relationships with retailers, customers, drivers, and consumer product companies. It also delves into the company’s cost structures, revenue streams, and the importance of achieving scale for sustainable growth.

The case highlights the tension between focusing on GAAP financials versus non-GAAP measures like adjusted EBITDA, drawing comparisons with public peers like Lyft and DoorDash. DelishGo’s management must navigate these financial metrics to provide an accurate snapshot of the company’s performance and future potential, ensuring investors remain confident in their vision and strategy.

Learning Objective

This case is designed to help students understand key concepts in unit economics, financial metrics, and strategic decision-making in a high-growth startup environment. Students will analyze the impact of rapid expansion on financial health, explore the importance of achieving scale, and differentiate between GAAP and non-GAAP financial measures. By discussing DelishGo’s situation, students will develop skills in evaluating business models and crafting strategies for sustainable growth and profitability.
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