As a FreightWaves story opined in May, it’s time the logistics industry took notice of Gopuff. Well, it has, and so have investors.
According to a securities filing in Delaware first flagged by Prime Unicorn Index, the instant delivery company backed by SoftBank, Fidelity Management and Research Co. and Blackstone Group has raised $1.5 billion in what’s being called a series X raise, which could push its valuation as high as $40 billion, Axios reported. Multiple reports suggest the raise is happening in anticipation of a Gopuff IPO as early as mid-2022.
The funding round, which has yet to close, will take the form of a convertible note issued by Guggenheim Partners. That would mean that if Gopuff’s market cap surpasses $40 billion at IPO, then Guggenheim and other investors could liquidate their shares at the $40 billion price instead, in exchange for taking on debt.
Obtaining funding through a convertible note is a popular path for startups looking to go public because it allows them to issue debt in exchange for financing, which can boost the valuation at IPO. Airbnb (NASDAQ: ABNB) employed this same strategy in the months leading up to its 2020 IPO.
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Gopuff’s move toward going public shouldn’t come as too large of a surprise considering the meteoric rise it has experienced this year. It began in earnest back in March, when the Philly-based instant delivery company more than doubled its valuation after securing a $1.15 billion raise.
But that was only the beginning. In May, Gopuff locked down an exclusive deal with Uber for delivery of everyday essentials and acquired U.K. delivery provider Fancy. And just a month after that, it nabbed another $1 billion in funding in a series H raise that pushed the startup’s valuation to a staggering $15 billion.
Gopuff acquired a second U.K. delivery platform, Dija, later in the year, and last month the startup officially launched in the country with an eye toward a Europewide expansion. It’s also been reported that Gopuff made an offer to acquire German instant delivery platform Flink, which is a member of the unicorn club itself and is backed by DoorDash (NYSE: DASH), but a deal has yet to come to fruition.
The burgeoning platform just this week came across even more funding from an unlikely source: singer and actress Selena Gomez, who has invested an undisclosed amount in the company and will sign on as a “strategic partner,” according to Fortune.
Now with another $1.5 billion in tow from the series X round, Gopuff is gearing up to liquidate its assets and go public, and if it does, its failure or success could serve as a litmus test for other instant delivery companies.
More and more startups are beginning to deploy the instant delivery model, and they’re garnering the interest of investors. One of these is New York City-based Jokr, which earlier this month became a unicorn company within a year of being founded, but other startups like Gorillas and Getir are also growing rapidly and shaking up the space.
Even established delivery companies are getting in on the action now. Recent reports have revealed that both Instacart and DoorDash have plans to deliver groceries in 15 minutes or less, with DoorDash having already rolled out an initial pilot in New York City.
But unlike those companies, instant delivery is Gopuff’s entire model, which makes it unique among food and grocery delivery platforms that are public or plan on going public. By going public, Gopuff might just prove — or disprove — that instant delivery can be successful, all on its own.
As of publication, Gopuff had not responded to Modern Shipper’s request for comment.