These valuations are driven by huge liquidation preferences which will totally wipe out common stockholders in any down round or distressed sale.
So 1x is standard, and nothing crazy like what you're implying.
Or is the argument that these companies get very high nominal valuations but the terms on the rounds they raise include punitive preferences?
1. Normal investment of $Y at valuation X implies that you, the investor, think that the company is worth more than X. If it exits for more, you'll get more, less you'll get less. But investing $Y at valuation X with a 2x liquidation preference means that you think the company is worth merely Y. The valuation basically doesn't matter any more. If I invest $10 at a $100 valuation and the company exits at a $500 valuation, I get a $40 profit. If it exits at a $50 valuation, I've lost $5. The valuation I invest at makes a big difference for my profitability. But consider the same scenario with a 2x liquidation preference - in the happy case, I get the same profit. In the sad case, I've still doubled my money.
2. Investors in startups are not perfectly rational investors. If I own an existing stake in a company, I would fight tooth and nail to prevent any new money coming in from having a liquidation preference over me. But in truth, if the company can raise money at a $2 billion valuation normally, or a $4 billion valuation with a preference, a fund can report double the gains to the people who actually put money in it. So they stay quiet, show off the impressive paper returns of their current investment fund, and go on raising the next one. This effect is doubly pernicious when the later investors are also earlier investors - they can basically juice their own balance sheet. On paper, the existing stake is worth more because of the inflated valuation, and the new stake is a heads-I-win-tails-you-lose.
And at the lowest preference are all the employees. Founders take money off the table in the inflated new rounds, so while they technically have a lower preference they've still cashed out significantly.
Even if the company falls apart and sells for $100M you still get your money back. If it declines to $200M you get all of that before anyone else.
In reality terms vary substantially. In this case, Doordash had just raised and didn’t need to raise again. Depending on how desperate investors were to get in, they might have gotten clean terms.
Those liquidation preferences mean that investors will pay more for their equity % than they would have without them which inflates the valuation estimates used by the above formula. The basic idea is that not all % equity is the worth the same amount, but it is assumed to when a valuation number is reported.
If a company has 5 classes of shares (common, A, B, C, D), then it's reasonable to value the company's equity by estimating the value of 1 share of each class, multiplying by the number of shares issued, and summing up these products.
The more common method used by PR folks and journalists is:
[Price at which class D shares were last bought] * [Total number of outstanding common, A, B, C and D shares]
This is incorrect if the rights attached to the different classes are different enough that the values of the shares are different. And that's the usual case.