Last fall, delivery startup goPuff made a huge splash by raising $ 380 million in funding and acquiring West Coast liquor retailer BevMo shortly thereafter. A few months later, the Philadelphia-based company is announcing that it has raised an additional $ 1.15 billion in financing at a valuation of $ 8.9 billion (compared with $ 3.9 billion in October).
Available in more than 650 US cities, goPuff offers a wide variety of products in less than 30 minutes, charging a fixed delivery fee of $ 1.95. Rafael Ilishayev and Yakir Gola, who serve as co-CEOs, founded the company in 2013 while they were students at Drexel University. When I first spoke to Gola last fall, he told me that the pair thought, “There must be a better way to get convenience products delivered.”
The company now says that its vertically integrated approach is a key advantage. GoPuff buys products directly from manufacturers and then distributes those products through its more than 250 “micro-service centers” and a network of independent drivers. Ilishayev said that this results in fast deliveries, strong unit savings and a model that passes delivery rates directly to drivers.
“It is important that we are gaining margin with the product, not with people,” he said.
The company continues to expand its product line in the categories Better For You (healthy snacks), Beauty and Baby, in addition to curated Mystery Boxes. When I asked how the new products fit into the big goPuff brand and strategy, Ilishayev replied: “People, throughout our existence, have tried to put us in an industry: ‘Are you convenient? Are you a pharmacy? ‘The reality is that we are neither. We are in this category of instant needs and our production innovation comes exclusively from consumer demand … There is no category that we offer on goPuff that consumers did not want.
GoPuff says the new financing will allow it to continue expanding in the United States, as well as internationally, and to introduce new products. The round comes from D1 Capital Partners, Fidelity Management and Research Company, Baillie Gifford, Eldridge, Reinvent Capital, Luxor Capital and SoftBank Vision Fund 1.
In a statement, D1 founder and investment director Daniel Sundheim said:
goPuff is truly in a separate category. We believe that the company’s vision and differentiated model drives the industry’s leading economy and sustainable growth. Since we initially invested in goPuff last fall, we have been constantly impressed by the team’s ability to successfully execute its growth plans. The company’s potential is enormous and we look forward to the unique opportunities that lie ahead.