GoPuff’s rating for digital convenience stores backed by SoftBank has more than doubled in five months amid a pandemic boom in food and grocery delivery across the Internet.
The company announced on Tuesday that it had raised $ 1.15 billion at a valuation of $ 8.9 billion. This is a major leap from GoPuff’s last round of financing in October 2020, which the company valued at $ 3.9 billion.
GoPuff said in a statement that it will use the new funds, which include an investment in SoftBank Vision Fund 1, to continue the expansion in the US and internationally. It also plans to invest in new categories for technology, talent and products, such as beauty, baby products and healthier food offerings.
GoPuff, based in Philadelphia, was introduced in 2013 by two college students at Drexel University. The company aims to tackle traditional convenience stores by offering a range of household necessities, such as medicines that are not available and snacks and alcohol cleaners.
The company achieved early success among college students, but has since expanded its consumer base to other demographics by producing products that goPuff calls ‘immediate needs’. GoPuff’s average users are in their thirties, the company said.
“We have people from all societies ordering goPuff, whether it’s a mother who has to deliver her diapers or baby products, or a pet owner who needs pet food,” goPuff co-founder Rafael Ilishayev told CNBC’s David Faber said in an interview with Squawk On the Street “Tuesday morning.” We are actually seeing the fastest growth on an annual basis in these new innovative categories, rather than the traditional core goPuff categories we started with. “
The service is available to users in more than 650 cities across the US. GoPuff says it can deliver goods to the store door in about 30 minutes via contracted delivery managers who pick up items at the company’s approximately 250 micro-fulfillment centers, which are rented. by the company.
Its physical footprint also includes more than 160 stores operated by the liquor chain BevMo !, which the company acquired for $ 350 million last November.
GoPuff is pulling in more cash after the coronavirus pandemic pushed millions of consumers indoors, forcing them to rely on online services for both essential and non-essential goods. Food and grocery delivery services saw a huge increase in activity, including goPuff, which recorded a 400% increase in order volume year-on-year between the first half of 2019 and the same period last year.
GoPuff is not the only company that is expanding the range of products that consumers can deliver to their home within an hour or on the same day. Amazon’s 2-hour Fresh service, as well as DoorDash, Uber Eats, Postmates and Instacart, added categories such as groceries, personal care items and household goods.