The valuation of SoftBank-backed digital convenience store goPuff has more than doubled in five months amid a pandemic-fueled boom in online food and grocery delivery.
The company announced on Tuesday that it has raised $ 1.15 billion at a valuation of $ 8.9 billion. That’s a significant increase from GoPuff’s last round of funding in October 2020, which valued the company at $ 3.9 billion.
GoPuff said in a press release that it will use the new funds, including an investment from SoftBank Vision Fund 1, to expand further in the US and internationally. It also plans to invest in new technology, talent and product categories, such as beauty products, baby products and healthier foods.
Based in Philadelphia, GoPuff was launched in 2013 by two students at Drexel University. The company wants to take over traditional convenience stores by offering a range of household supplies such as over-the-counter medicines and cleaning products for snacks and alcohol.
The company found early success among college students, but has since expanded its consumer base to other demographics by offering products that goPuff calls “immediate needs.” The average GoPuff users are in their 30s, the company said.
“We have people from all walks of life who order goPuff, whether it’s a mom who needs her diapers or baby products to be delivered, or a pet owner who needs pet food,” goPuff co-founder Rafael Ilishayev told CNBC’s David Faber in an interview on “Squawk On the Street” Tuesday morning. “We’re actually seeing the fastest annual growth in these new innovative categories, rather than the traditional goPuff core categories we launched with.”
The service is available to users in more than 650 cities in the U.S. GoPuff says it is able to deliver goods to shoppers in approximately 30 minutes through contracted delivery drivers who pick up items from the approximately 250 micro-fulfillment centers of the U.S. company, which are rented out. by the company.
Its physical footprint also includes more than 160 stores operated by the alcoholic beverage chain BevMo !, which the company acquired for $ 350 million last November.
GoPuff is pulling in more money after the coronavirus pandemic pushed millions of consumers in and prompted them to rely on online services for both essential and non-essential goods. Food and grocery delivery services saw a massive increase in activity, including goPuff, which registered a 400% year-on-year order volume increase between the first half of 2019 and the same period last year.
GoPuff isn’t the only company working to expand the number of products consumers can get to their door within an hour or the same day. Amazon’s 2-Hour Fresh service, as well as DoorDash, Uber Eats, Postmates, and Instacart, have added categories such as groceries, personal care items, and household items.