A bag of groceries with the logo of the American on-demand delivery company Gopuff.
With delivery startups battling each other to be the fastest, Gopuff co-founder and co-CEO Yakir Gola said Tuesday that it can hold out to outlast rivals.
He said the venture-backed company isn’t just looking to get diapers, snacks and more to customers’ doors quickly. He said it also wants to provide a better customer experience and build a profitable business that can be scaled globally.
“I really think we’re in category one,” he said at the grocery conference in Las Vegas.
Gopuff is part of an increasingly dense field of startups that resemble an online version of convenience stores and grocery stores. Unlike other delivery companies like DoorDash and Instacart, GoPuff does not collect goods from retailers’ stores. Instead, it has its own network of micro-fulfillment centers – mini high-tech warehouses – with inventory. Contract workers pick up the orders and bring them to customers’ doors quickly in around 30 minutes.
Some competitors such as Gorillas, Getir and Jokr have entered new markets and have promised even faster delivery times of 15 minutes or less.
Still, Gola said Gopuff was a veteran in that category. Gopuff coined a term for the group: “Instant Needs” companies.
Gopuff was born in 2013 when Gola and his co-founder Rafael Ilishayev were students at Drexel University in Philadelphia looking for a way to get late night snacks like chips and candy without running to a supermarket. The company started supplying these goods along with hookahs and tobacco products.
Today it operates in more than 1,000 cities and stocks more than 4,000 items from pet foods to over-the-counter medicines. Its valuation reached $ 15 billion in July. And it includes stationary stores that also serve as warehouses. It acquired two regional alcoholic beverage chains: the California liquor chain BevMo! in December for $ 350 million and Liquor Barn, based in Kentucky, in June for an undisclosed amount.
He said Gopuff was keeping delivery fees down and improving its economics by eliminating the middlemen and making money selling products and advertisements. Delivery fee is $ 1.95 per order, with an additional charge of up to $ 2 for orders that contain alcohol.
“Once too many parties are involved – the business, the driver, the delivery platform itself – the margin starts to erode and the customer experience is not flawless,” he said.
Gola said the company is adding 40 or 50 micro-fulfillment centers every month and moving into new categories. Household items such as cleaning supplies and Covid-19 tests were added to the home during the pandemic. It also started delivering hot items such as coffee, breakfast rolls and pizza to selected locations.
The average customer is still young, he said, in their late 20s or early 30s, but college students make up a declining percentage. Gopuff’s fastest growing category year over year is baby products, he said.