Callowhill-based on-demand delivery company goPuff reportedly took a $750 million investment from Japanese conglomerate SoftBank’s $100 billion Vision Fund in August 2019.
The news was first reported by tech industry news site The Information. SoftBank, which might sound familiar for its $4.6 billion loss in former coworking darling WeWork, has reportedly retained an option to invest an additional $250 million in 2020.
Companies typically like to cheerlead their major investments as a signal to the market and their competitors, but this one remained unusually quiet. A goPuff spokesperson has not yet responded to independent confirmation and followup from Technical.ly.
goPuff, best known for its quick delivery of the likes of beer, snacks and Juul pods, was founded by Yakir Gola and Rafael Ilishayev in 2013 when the pair were Drexel University students. In 2016, the company secured an $8.25 million Series A round to fuel their expansion to new markets (following a $3.25 million raise in 2015) and has since expanded to more than 150 delivery locations around the country and more than a thousand employees. It’s a rare example of a consumer-facing company grown in Philadelphia.
The company is in the midst of building a new 30,000-square-foot headquarters at 3rd and Spring Garden streets, thanks in part to a state-backed grant, which will replace its current 7,000-square-foot HQ in Callowhill as of 2022. In December, goPuff was named Growth Company of the Year at the Technical.ly Awards and has generally remained on the shortlist of the region’s most watched tech-powered startups. Last fall, Ilishayev told Technical.ly onstage that goPuff was offered a $50 million package from New Jersey to relocate its headquarters there.
Even still, this will no doubt change how the already-hyped growth company is seen here and beyond. The Information calls the $750 million one of mega-fund SoftBank’s largest U.S. venture investments of 2019. (So what has goPuff already done and what’s next with that pool of cash? No specifics yet, but they been aggressively advertising and expanding lately.) Besides the huge number at stake — in an app-based logistics company, no less — what’s notable about the deal is that it happened, silently, in Philly.
“What’s funny is I got emails from SoftBank once or twice in the last few months saying they were going to be in Philly and asking to meet,” a local software company CEO told Technical.ly. “I never thought to ask why.”
Alongside competitors Instacart and DoorDash, goPuff is reportedly valued at over $1 billion dollars, marking it a unicorn in a city with few privately-held, billion-dollar growth companies. The “unicorn” term often refers to software-first companies, but last year’s $4.8 billion Spark Therapeutics exit marked a city-based biotech example.
goPuff was first known to help 20-somethings get snacks and beer late night. Spark relies on advanced research to combat blindness. It’s easy to contrast the two. When contacted about the deal, one respected Philly tech business leader sneered: “Some companies aspire to cure cancer. Philly’s next unicorn delivers Cheetos in minutes. So appropriate.”
goPuff is also now tied to the SoftBank Vision Fund, which is both the world’s largest private-market tech investor and one bedeviled by being representative of over-valued tech hype, as in the case of WeWork. One respected Philly tech observer joked with Technical.ly: “Lately, SoftBank has been really good at making dumpsters full of cash goPuff.” (Get it?)
Still, with that level of investment, even from an embattled mega-fund, it’s a sign of how this Philadelphia tech company can hold its own in a highly competitive logistics sector. Enthusiasm comes for big company valuations for a few genuine reasons: wealth creation, job growth and proof that it can be done again. Any place, particularly a poor big city like Philadelphia, is in need of new generations of employers and economic engines. goPuff in particular has a young demographic and an easy-t0-grasp business model.
“It’s a young expanding company in Philly that’s in many cities around the country with an interesting concept that I would have never thought of,” Mayor Jim Kenney said in 2017: “It’s a great success story for Philadelphia.”
This story includes additional reporting by Christopher Wink.-30-