Softbank-backed delivery startup goPuff said on Thursday it would buy back BevMo! at $ 350 million, paving the way for the company to enter the California market.
The deal also means that goPuff, which now offers on-demand home delivery in 500 cities, will significantly expand its infrastructure with the addition of 161 BevMo stores! In California, Arizona and Washington.
The announcement comes less than a month after goPuff raised $ 380 million in a round led by Accel and D1 Partners. Investors also include Softbank Vision Fund and Luxor Capital, which lifted the company’s valuation to $ 3.9 billion. GoPuff was founded by the co-founders Yakir Gola and Rafael Ilishayev seven years ago when they were students at Drexel University.
“Our point is, BevMo! Is a great brand. It̵7;s an iconic brand, a great customer base, a great distribution network and we think this is a move.” made sense for us and a big move to bring goPuff to California, “said Gola.
According to some industry experts, this agreement has special significance during a pandemic.
Nielsen data shows on-premises alcohol sales (including groceries and liquor stores) during a pandemic that began in early March, up 22% year-on-year, due to increased customer base. buy booze when they spend more time at Home.
“Both home alcohol consumption and food and drink delivery increased, which shows demand,” said Darren Seifer, food industry analyst at The NPD Group. “My mindset is that a combination of the two, if well executed, is a good idea as it helps consumers regain some of the restaurant experiences they lacked.”
For BevMo !, the partnership is an opportunity to capture more of that increasing demand.
“Joining goPuff, a company that has created a truly differentiated approach and instantaneous demand portfolio, will enable us to better respond to the growing needs of our consumers, including even delivering daily necessities directly to their doorstep, “said Josiah Knutsen, CEO of BevMo! .
GoPuff’s Gola said it’s not clear the company will take advantage of BevMo’s assets! To eventually provide the service of the delivery of household goods to Californians, he also did not disclose the schedule. However, he said, the company is testing the best use of its retail beverage outlets.
“The idea is to use the infrastructure and the alcohol license that BevMo! Has built as well as the brand and customer base – how do we take that and use it as the foundation to launch goPuff in California, “Gola said, reflecting on some of the questions the company faced when thinking about a California launch. He said the deal with BevMo! would bring California jobs, but declined to say how many.
Announced after California passed Prop 22 this week, the proposition has won winnings for contract economy firms like Uber, Lyft and DoorDash by allowing them to continue using independent contractors. .
Gola says that while goPuff uses independent contractors as drivers, the staff in its 200 micro-execution centers are W-2 employees. He added that their business model is also different from delivery rivals Instacart, DoorDash and Postmate, all of which have added convenience store and pharmacy partners since the pandemic.
For starters, he said, goPuff works directly with consumer packaged goods companies to provide fulfillment centers that the company leases, with items ranging from diapers to alcohol. As a result, Gola says goPuff can make large-scale purchases, keep delivery charges at $ 2 per delivery, and make deliveries within 20 to 30 minutes.
Editors’ note: This story has been updated to reflect that goPuff employs its execution centers.