There is almost a kind of meme for anticipating a Gopuff IPO, which possibly could come later this year. This is was what Reuters reported at the time of Gopuff’s new billion dollar round in March:
“A source close to the matter told Reuters that GoPuff has already started discussions with financial advisers and banks and are mulling whether to go forward through a traditional initial public offering or a merger with a special-purpose acquisition company.”
if Gopuff, now valued at $8.9 billion, can stay roughly on track with its goal of tripling revenue this year (again) while keeping operating losses under control, and demonstrating profitability in its longest established markets, then it would probably be a go. The biggest risk could be a slow down in the market and its receptivity to highly valued IPOs, which indeed is possible later this year (in my opinion).
But the nature of Gopuff’s business adds to the allure. Unlike some enterprise software product, the Gopuff brand is becoming known widely as it expands across the nation. And the people who like the brand or at least appreciate its convenience, may become enamored with the idea of owning a piece. The rumor mills on the web are heating up.
It could be that the only thing that may slow Gopuff down in the short term would be a shortage of drivers.
DoorDash’s December IPO was a huge positive to SoftBank’s market value (although its becoming more of a direct competitor to Gopuff as it adds dark stores), so I can only imagine that SoftBank anxiously anticipates an eventual Gopuff offering.
Also, people should be prepared for efforts to acquire Gopuff that could come at any time.
A Bloomberg article entitled “Amazon (AMZN), Gopuff Are Said to Explore Deal for Germany’s Flink ” surfaced today. Not being a subscriber, I’m unable to link to the content.
Flink, which officially launched in January, is a “dark store” home delivery startup like Gopuff. It raised $52 million in March. Flink has operations in ten German cities, and has also entered France and the Netherlands.
In May, Gopuff acquired UK-based Fancy.
If I were an investor in Gopuff, I’d worry a bit about its European expansion strategy. Gopuff’s US rollout seems to be proceeding fairly well, but managing Europe simaltaneously creates more financial risk.
Amazon, on the other hand, must be considered a potential acquirer of any major player in the home delivery space.
Launched late last year, Fancy is a graduate of Silicon Valley accelerator Y Combinator. Operating in six cities, Fancy has a business model similar to Gopuff’s in that it operates its own microfulfillment centers with company-owned inventory. .
“Acquiring Fancy is an important first step as we accelerate expansion in the UK and Europe and quickly accelerate our investment in the international market,” aid Daniel Folkman, Gopuff SVP of Business in a statement.
Gopuff has hired former Amazon Vice President of Global Logistics Tim Collins as its new senior vice president of operations, Business Insider reported last week. Collins had been with Amazon since 1999, except for one brief departure.
Collins had left Amazon for Uber in early 2015, but returned to Amazon in late 2016.
Meanwhile, The Information reported Monday that Gopuff revenue more than tripled in 2020 to $340 million, and is expected to triple again this year to around $1 billion. I could only read a snippet (subscription required), so I couldn’t tell if the article had any additional information about Gopuff’s finances, or what its breakeven point might be.
Several news outlets are reporting that goPuff may be close to acquiring UK delivery startup Fancy Delivery.
Fancy launched in late 2020 after graduating from Silicon Valley’s Y Combinator and currently operates in 4 cities in the UK. It has a model very similar to goPuff, including having its own local fulfillment centers.
goPuff Accelerates Geographic Expansion, Growth and Innovation with Acquisition of BevMo!
Deal Significantly Bolsters goPuff’s Nationwide Reach with Presence Across California; Provides BevMo! Customers with an Enhanced Experience and Delivery Solution to Meet their Immediate, Everyday NeedsNovember 05, 2020 01:40 PM Eastern Standard Time
PHILADELPHIA & CONCORD, Calif.–(BUSINESS WIRE)–goPuff, the go-to platform for consumers’ everyday needs, today announced that it has entered into a definitive agreement to acquire BevMo!, the leading alcoholic beverage specialty retailer on the West Coast, for upfront consideration of $350 million.
goPuff accelerates geographic expansion, growth and innovation with acquisition of BevMo!Tweet this
“We’re proud to bring goPuff’s operations to California and look forward to investing in talent and real estate across the state,” said goPuff co-founder and co-CEO Rafael Ilishayev. “Partnering with BevMo! quickly advances our strategic objectives of providing more customers in new geographies with a seamless solution for their instant needs. Through this acquisition, goPuff will operate coast-to-coast, solidifying our presence as a leading, national consumer business.”
Powered by its industry-leading technology and unmatched distribution network of over 200 micro-fulfillment centers, goPuff currently serves customers in more than 500 U.S. cities. The acquisition significantly accelerates goPuff’s entry into California, and will provide millions of new customers in BevMo!’s network of neighborhood stores with access to immediate delivery of everyday items, including baby and pet products, cleaning supplies, food and alcohol, along with local favorites.
“BevMo! has an extremely loyal customer base and a deep infrastructure across three states,” said goPuff co-founder and co-CEO Yakir Gola. “Bringing its iconic brand, locations and employees together with goPuff’s tech-driven, vertically integrated operating model positions us for unparalleled opportunity. We’re thrilled to welcome BevMo! employees to the goPuff team and look forward to building relationships with these new local communities.”
BevMo!’s footprint of 161 neighborhood stores located throughout California, Arizona and Washington provides extensive infrastructure for goPuff to seamlessly integrate into its network of local micro-fulfillment centers, enabling it to reach customers across the West Coast in 30-minutes or less. Through goPuff, BevMo! customers will soon have access to instant delivery of alcoholic beverages as well as everyday items across goPuff’s rapidly expanding product inventory.
“Joining goPuff, a company that has created a truly differentiated approach and defined the instant needs category, will allow us to better meet our consumers’ evolving needs, including delivering everyday essentials directly to their doorstep,” said Josiah Knutsen, CEO of BevMo!. “We look forward to helping introduce goPuff to California and working together to further enhance the experience for BevMo! customers and our communities at large.”
“On behalf of TowerBrook and the board, we want to thank the thousands of dedicated and talented employees that have helped make BevMo! the beloved brand it is today,” said Cathy Stauffer, Chairman of BevMo!. “goPuff shares our commitment to a superior customer experience and providing ultimate convenience. With different roots, but highly complementary business models, values and goals, goPuff is a perfect fit for BevMo!’s next chapter.”
The transaction is anticipated to close within 30 days, subject to customary closing conditions.
Evercore acted as financial advisor to goPuff in connection with the transaction. Cooley LLP acted as goPuff’s legal advisor.
J.P. Morgan provided financial advisory services to BevMo! Kirkland & Ellis LLP acted as BevMo!’s legal advisor in connection with the transaction.
goPuff is the go-to solution for immediate everyday needs, fulfilling customer orders of cleaning and home products to over-the-counter medications to food and drinks, and in some markets, alcohol – in just minutes. With micro-fulfillment centers in every market it serves, the company delivers thousands of products quickly for a flat $1.95 delivery charge. goPuff is open 24/7 in many markets and late night everywhere else to bring customers what they need, when they need it most.
BevMo! is the leading alcoholic beverage specialty retailer in the western United States, with 161 stores located throughout California, Arizona and Washington. BevMo! provides a uniquely friendly and welcoming environment for competitively priced alcoholic and non-alcoholic beverages. The retailer also has a wide assortment of complementary products such as specialty foods and snacks, cigars, glassware and related bar and wine accessories. Its friendly and product-knowledgeable team members assist both enthusiasts and first-time buyers of wine, spirits and beer. BevMo!’s philosophy is simple: we help find the “perfect drink for every glass.” For more information, visit http://www.bevmo.com.
The wire had since gone dead on that subject, and with the fallout from the WeWork debacle and stories about Softbank backing away from some investment opportunities at the last minute, I assumed it had walked away from goPuff. But not so fast; today The Information‘s Cory Weinberg and Amir Efrati reported that Softbank had indeed agreed to lead a $750 million investment in goPuff last August, with an option to invest $250 million more this year.
goPuff, founded by former Drexel students Rafael Ilishayev and Yakir Gola, has a strategy of building and stocking its own local distribution hubs rather than piggybacking off of other outlets, which is probably a more expensive route to achieve market coverage. It also needs to enhance its marketing to reach beyond college campuses, where word of mouth is strong.
The article didn’t address valuation, as I recall, only getting a peek before it disappeared behind the paywall. But the amount of the latest investment, which is larger than one might have thought, certainly makes goPuff a player among a small circle of major competitors.