The co-founder and chief executive officer of Postmates Inc. was trying to pitch a food delivery business to investors, just as venture capitalists were tightening their belts and cash-burning delivery startups were falling out of favor globally. “It was a super, super difficult fundraise for us,” said Lehmann.
Today, Lehmann is pleased to say his company finally has more money in the bank. Postmates raised $141 million in a financing round led by Founders Fund. The San Francisco VC firm, co-founded by billionaire Peter Thiel, was already an investor but agreed to step up its support and add partner Brian Singerman to the board of directors. Postmates sold shares at the same price as last year’s round. The company said the additional cash gives it a valuation of about $600 million.
“Nobody ever promised me a billion-dollar valuation, so I feel good,” Lehmann said at the San Francisco office of his five-year-old startup. “It kind of reflects where the market is right now. It is not as disappointing as some people try to draw the picture.”
Lehmann makes an observation a lot of people are making about Uber:
“Uber’s main mode is this Death Star thing,” Lehmann said. “They’re using their balance sheet as a weapon very well, and I think it’s actually unprecedented.”
Certainly, everything that is “Uber for X” in the transportation sector is or will be subject to competition by Uber. And Uber will keep on getting more money because the unprecedented amount of money they have raised already creates a gravity of its own. (Both as real ammunition against competitors and as FOMO for investors.)
Postmates wants to expand internationally next year. Postmates is now completing more than 1.5 million deliveries per month over its current 44 markets. The company expect to reach a gross merchandise volume of $1 billion by the end of the year.
As TechCrunch has previously reported, Instacart has multiple revenue streams. The company charges customers a markup on groceries, plus a fee for delivering items to their doors. In addition, consumer packaged goods brands pay Instacart to advertise on its platform. And the startup strikes revenue share agreements with partners including grocery chains like Whole Foods. […]
Emerging competitors like Shipt, Postmates and StorePower may be hard-pressed to raise funding following this round. Instacart will likely be able to outspend smaller competitors for a good long while given this latest cash infusion.
Though this may be true regarding other startups in this space, the two big elephants remain: Amazon and Uber.
Amazon is not only working on Amazon Fresh but is additionally setting up Prime Now as a local marketplace not least for food. Recently, Prime Now gained the first delivery options from two grocery chains in Seattle. Geekwire:
Amazon is expanding its Prime Now one- and two-hour delivery service in Seattle to include delivery from local stores, starting with two popular independent grocery chains: PCC Natural Markets and Uwajimaya.
Prime Now started by delivering products from Amazon, before adding restaurant delivery, which was piloted in Amazon’s hometown before expanding to other parts of the country. In the case of grocery stores, however, Seattle isn’t the first. Prime Now currently offers delivery from local stores in Portland, Chicago, New York, and San Diego.
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