Gopuff, the “instant” grocery delivery startup that has had an acquisition and expansion rift in recent months to scale its business, is also looking to raise funds to fuel those efforts. Documents uncovered by the Prime Unicorn Index and shared with TechCrunch show the startup filed papers in Delaware to raise $ 1 billion at a pre-valuation of $ 14 billion.
As with all Delaware filings, they only tell part of the story, so the company could end up more or less raising before the round ends. (And in this case it looks like “more”.)
For some funding contexts, Gopuff raised $ 1.15 billion at a valuation of $ 8.9 billion as recently as March. And that round came just months after a valuation of $ 380 million (out of a valuation of $ 3.8 billion). Gopuff’s instant food model apparently comes with immediate funding: together, the three funding rounds would total around $ 2.5 billion over 10 months. (Investors in the company’s previous rounds were Accel, D1 Capital Partners, Fidelity Management and Research Company, Baillie Gifford, Eldridge, Reinvent Capital, Luxor Capital, and SoftBank.)
Much like the investment race in the transportation-on-demand market, much of the fundraising in the instant grocery store appears to be aimed at scaling up as quickly as possible to build technology, operational, and customer trenches.
For Gopuff, part of the money raised so far was used for organic expansion. In other words, it is investing in order to acquire new customers and expand its infrastructure – drivers, “dark” stores with their products and, most recently, “Gopuff kitchens” – in the more than 650 cities in the USA where it already has its 1.95 US Dollar operates a flat rate “in minutes” delivery service. This is likely to happen especially quickly considering that others like DoorDash are also seriously competing for the same model for quick deliveries of a limited selection of food and drink, household items, and over-the-counter medication.
The story goes on
In addition, some of the accumulated cash is used for acquisitions. So far these have been limited to the USA and to expand Gopuff’s breadth in this market. It bought alcohol retailer BevMo for $ 350 million in November 2020; and in June of this year, Gopuff acquired the logistics technology company RideOS for $ 115 million.
The next phase of this acquisition process could focus on acquiring similar companies in key markets that Gopuff would like to be in in the future, particularly internationally, in order to meet the reported goal of reaching $ 1 billion in sales this year (3x Previous year’s figures).
In June there were rumors that Gopuff had turned to Flink, an instant food player in Germany. While this has got nowhere (yet?), Well-placed sources – and apparently others – have told us that Gopuff is also keeping its international eye on England, and is in talks about the acquisition of two different instant delivery-based companies London, the first fancy in February and more recently Dija.
Gopuff also declined to comment on Dija, but we have several well-placed sources telling us it’s a work in progress. (The fancy deal was closed in May.)
London is currently a very competitive market for instant grocery delivery – not least because it’s dense and often difficult to get to, has shown a strong consumer appetite for on-demand delivery services, and a population of younger people with a decent amount of food available Income to pay a little more for convenience
That speaks for opportunities, but possibly also for too many hopes. In addition to Dija and Fance, we have Getir from Turkey, supported by Sequoia and a number of others who are currently playing an ambitious international role; Gorillas (like Flink, from Berlin); Zapp; and Weezy – all offer “instant” grocery deliveries. And these are just the independent, newer startups. Still to come: established restaurant suppliers like Deliveroo, who might also throw their hats in the ring.
Given this area, it may not come as a surprise that Dija struggled to raise more money, and this led the startup to look for buyers as an alternative.
This is a trend that’s also happening elsewhere: in Spain, Getir acquired Blok earlier this month, another new instant player that was struggling to get investors on board. We have confirmed with well-placed sources that Dija had also spoken to Getir in this regard (that went nowhere) before Gopuff entered the picture. There will probably be more of that.
“It’s going to be a bloodbath,” a major investor recently described the instant food market to me.
Given that online groceries still remain a relatively small slice of the market – even with the pandemic and its changing impact on e-commerce, it is still below 10% of sales in even the most adoptive cities there is still a lot to play in “instant” grocery stores. But if this last round shows us anything, it’s that the most promising of these delivery companies will continue to raise a lot more money to position themselves as consolidators in it.
Additional coverage: Natasha Lomas
Updated to show the increase to $ 1 billion and increase the overall rating in the H Series. PrimeUnicorn originally placed it at $ 750 million; Sources corrected the number.
