DoorDash explains that its viral buy-now, pay-later deal with Klarna wasn’t meant for burritos

But at Shoptalk, DoorDash’s vp of ads, Toby Espinosa, told Modern Retail that the partnership instead was designed less for food and more for the 25% of its customers — around 10 million of its 42 million monthly active users — who order from non-restaurant retailers. That could include deliveries of AirPods, flowers or other larger ticket items. And in fact, the financing offers — which allow customers to pay in four installments — are limited to products over $35.

That share of non-food orderers has risen from roughly 20% three to six months ago. Over the last few years, DoorDash has been partnering with more retailers to provide delivery services. DoorDash has 150,000 non-restaurant retailers on its platform, including grocery stores, convenience stores and pet stores. That number has doubled since 2022. Just last year, the platform added Camping World, The Vitamin Shop, Pet Supplies Plus, Sally Beauty, MAC Cosmetics, Lowe’s and DSW. As just one example of how much DoorDash increasingly relies on non-food deliveries, Espinosa said DoorDash delivered roughly 350,000 bouquets on Valentine’s Day.

“The thing that folks don’t know — even though we went on the burrito meme train for the partnership — is that it’s purpose-built for the 25% of consumers” who order from the non-food merchants, Espinosa said. “We didn’t need BNPL for a burrito, but for an AirPod, a TV, all of those use cases. We wanted to make sure our consumers have the ability to purchase those things within our ecosystem, just like they would on any other large retailer marketplace.”

In a separate interview, DoorDash’s vp of grocery and retail partnerships, Mike Goldblatt, said the financing program could be used for TV purchases or beauty stock-ups. “We want to give customers that flexibility,” he said. “Just given the [product] selection on the marketplace, there’s a wide, wide selection. So there are a lot of purchases that … I don’t want to say ‘make sense with Klarna,’ but that you can see are very relevant.”

The number of Americans using buy-now, pay-later services has grown from 49.2 million in 2021 to a forecasted 92.5 million by the end of 2025, according to eMarketer. That’s close to a third of the U.S. population. Meanwhile, Klarna is gearing up to go public as it filed an IPO prospectus earlier this month.

In a blog post on March 20, Klarna responded to the conversations around financing food items with a similar message about its link to DoorDash’s expansion outside of food. It also defended the use of the platform as a non-interest alternative to credit cards that’s less likely to pile up debt onto shoppers, saying 99% of its lending is repaid.

“Because there is no interest, our business model relies on customers repaying us on time, unlike credit cards,” the company said in the blog post. “So we conduct a thorough eligibility check before approving a purchase, and if a customer misses a payment, we restrict their use of our services — something credit card companies wouldn’t do, as they profit from late and revolving payments.”

Brad Jashinsky, a retail analyst for Gartner, said the virality of the partnership and how it was associated more with financing takeout shows how strong the DoorDash brand is in food delivery.

“When you’re known for food delivery and you start expanding beyond that, it’s a challenge to be thought of in the same way that consumers think of Amazon Prime whenever they’re shopping for anything,” Jashinsky said. He added that people may also turn to financing tools to be able to afford large grocery orders, as they already have with credit cards or payday loans. “A lot of people that are paycheck to paycheck are utilizing credit cards for this already and paying high-interest fees just for the essentials.”

DoorDash’s goal, according to Espinosa, is to be the largest commerce platform for deliveries in 30 minutes or less. In 2024, DoorDash grew its revenue 24% compared to 2023, the company reported in February. Growing the platform to include more than just restaurants, in turn, opens up opportunities on Espinosa’s side of the business with advertising — which has recently grown with new features such as an ads manager for large restaurant chains and a partnership with The Trade Desk in January offering new targeting and measurement features.

“It’s more of how to help the consumer versus anything to do with ads,” Espinosa said. “But if [we] help the consumer and we grow, then, of course, there are more opportunities for advertisers to be able to reach them.”

Editor-in-chief Jill Manoff contributed to this story.