Gopuff confirms a new $1 billion cash injection to expand its grocery delivery service
There is a new category of food delivery in the U.S., called "instant" delivery of essential groceries and other home goods for a flat fee of $1. The company has raised $1 billion in a Series H round and is valued at fifteen billion dollars. Guggenheim Investments, Hedosophia, and Adage Capital are some of the new backers.
Fidelity Management and Research Company was one of the previous backers. The Series H was still being closed when we reported last week. The funding will be used to continue expanding in North America, the U.K., and Europe, as well as to hire more people.
It currently operates 450 sites across North America and the U.K., which includes more than 285 dark stores, plus more than 185 retailers by way of its acquisition of BevMo earlier this year. The capital-intensive nature of building out a food-based, logistics- fueled transportation business is one of the reasons that Gopuff has raised such a large sum. A strong surge of competition is leading to that effort to grow.
Getir, out of Turkey, which was most recently valued at $7.5 billion, is also aggressively expanding. There is a wave of others, such as Flink,Gorillas,Glovo, Zapp, Cajoo, and Weezy, also bulking up their bank accounts to throw their delivery bags into the ring. In the U.S., established delivery giants such as DoorDash will be moving deeper into Gopuff's territory.
Gopuff believes it can give them a run for their money. While they were in university, Rafael Ilishayev and Yakir Gola founded Gopuff to fill a gap in the market for students looking for a quick and relatively low price. In a time when many of us were either being ordered by our municipal governments or acting on our own decisions to stay in place to curtail the spread of COVID-19, Gopuff's star rose quickly as an easy way to comply without compromising our consumerist tendencies.
Turkey's Getir, which has been around for years and is also building out a model of "instant" delivery of essential goods, has shown that there is staying power to the concept. Scott Minerd, global chief investment officer of Guggenheim Investments, said in a statement that Gopuff has built a strong business and solidified itself as the leading player. Rafael and Yakir are focused on maintaining fiscal responsibility while having the ability to successfully execute on growth opportunities.
This measured approach along with Gopuff's impressive offering has just scratched the surface. We are thrilled to support this company and look forward to being a part of their journey. The basic instant delivery of essentials has been augmented with more efficient distribution along with a wider vision of what constitutes an essential.
In addition to building out more dark stores to more easily distribute goods to customers who buy them, that has included starting "Gopuff kitchens" to make and deliver ready-made food, and buying alcohol retailer BevMo for $350 million in November 2020. Gopuff has been raising money to pay for this. Just months after a $380 million round at a $3.8 billion valuation, it raised $1.15 billion at an $8.9 billion valuation.
The three most recent rounds total around $2.5 billion in funding in 10 months, and the idea is that there may be more of where that came from. Ilishayev said that they were thrilled to have new leading global partners onboard, along with the support of their longstanding investors. The funding round will allow us to continue to do what we do best, which is deliver an unparalleled customer experience.
Gola said that the company had doubled down on its priorities, which included entering new markets in the U.S. and abroad. We want to improve the customer experience and bring the magic of Gopuff to new customers around the world.