GoPuff is an on-demand delivery service platform. Customers can select from more than 3,000 things, including pet food and workplace supplies.
Among the many ways GoPuff makes money is by charging a premium for its products, levying delivery fees, imposing membership fees, and selling advertising space on its website.
As GoPuff, the “instant” grocery delivery, has ramped up acquisitions and expansion in recent months, it is now hurrying to raise capital to help fund these efforts. Pre-money valuation of $14 billion and post-money valuation of $15 billion have been derived from documents provided by Prime Startup Index and shared with TechCrunch.
Due to the fact that Delaware filings only tell part of the storey, the company may raise more or less money before a round of financing closes. Initially, it appeared that $750 million had been raised, but it now appears that “more” has been raised.
GoPuff only raised $1.15 billion in March at a value of $8.9 billion, according to some. It followed a $380 million round (worth $3.8 billion) just a few months prior. Three rounds of fundraising would bring GoPuff’s total funding to $2.5 billion in just ten months, according to the company’s website.
It has received investment from Accel Partners and Vertex Science and Management Company as well as Eldridge Capital and Reinvent Capital. SoftBank also participated in the company’s first round of funding.
As in the transportation-on-demand industry, much of the capital in instant grocery appears to be targeted toward rapid growth in order to establish technological, operational, and consumer moats.
As a result, GoPuff has been able to grow by using some of the donations received thus far. There are more than 650 cities in the United States where it already operates its $1.95 flat price “in minutes” delivery service, including riders, “dark” stores stocked with its wares and, most recently, GoPuff restaurants, where it is aiming to attract new customers and grow its infrastructure.
Since DoorDash and other delivery services are vying for the same business model, it is likely to do so at a rapid pace.
But some of the money it has amassed is being used to acquire other businesses. These were formerly only available in the United States as a way to increase Gopuff’s market share in that country. For $350 million in November 2020, it acquired BevMo, an alcohol retailer, and for $115 million in June of this year, logistics technology company Videos.
In order to reach its claimed sales target of $1 billion this year, GoPuff appears to be focusing on purchasing similar companies in important sectors where it plans to operate in the future, particularly globally.
In June, GoPuff was accused of contacting Flink, a German fast food chain. We’ve been told by well-placed sources that GoPuff is in talks to acquire two other rapid delivery companies in London, the first of which was Fancy back in February, and the second of which was Dija, which was founded in 2013.
Another reputable source tells us that Dija is in the works at GoPuff as well.
On-demand grocery delivery services in London are currently a fiercely competitive business due to the city’s crowded and often difficult-to-navigate layout and the fact that many of the city’s younger residents have enough spare cash to spend a little more for convenience.
That’s a good sign, but it might also be a sign of an overabundance of candidates. Dija and Fence weren’t the only “instant” grocery delivery services represented; we also had Turkey’s Getir, which is funded by Sequoia and others and is actively expanding internationally; Gorillas (like Berlin’s Flink); Zapp; and Weezy. And to think, these are only the newest, stand-alone companies.
This is a trend that may be seen in other places as well: Newcomer Getir recently purchased Blok from a company that was struggling to recruit investors. According to reliable sources, Dija had already discussed this matter with Getir before GoPuff entered the picture. Even if the system goes down totally, there will still be more of them.
The fast food industry, according to a major investor, is going to be a carnage.
With the pandemic’s effect on e-commerce accounting for less than 10% of sales in even the most adoption-friendly places, there’s still a lot of room for growth in the instant food industry. When it comes to these delivery businesses, this latest round of funding shows just how much money they’re going to need in order to get a foothold in this lucrative market.
The Evolution of GoPuff
It was created in 2013 in Philadelphia, Pennsylvania, and has its headquarters there. Yakir Gola and Rafael Ilishayev, two university students, founded the on-demand food and shopping delivery network, which is now in its third year of operation. Previously, they sold convenience items from the back of their Plymouth Voyager truck before launching an app in December 2013. Following that, the programme was implemented in Chicago and Washington, D.C., before being gradually expanded to 650 locations throughout the United States.
Earlier this year, GoPuff raised $8.25 million in round A funding.
2019 – GoPuff raised $750 million from SoftBank, with a commitment to invest up to an additional $250 million in the company.
Capital raised in a funding round led by Accel and D1 Capital Partners totaled $380 million in 2020 for the company.