Gopuff fires CTO following his June arrest

A major change in the C-suite and a stop work order from the City of Philadelphia are shaking up Gopuff’s path to profitability. 

The Philly-based delivery giant fired boomerang CTO Sree Kotay on Friday after a June arrest for drug possession came to light, a spokesperson confirmed Monday morning, corroborating internal emails and court records viewed by Technical.ly.

“Sree Kotay’s employment with Gopuff was terminated on Friday. Consistent with company policy, we don’t comment on personnel issues,” the spokesperson said.

Also last week, Gopuff’s headquarters in Northern Liberties appeared to get hit with a stop work order, setting off rounds of social media chatter.

The city Department of Licenses and Inspections, which handles most building violations, has no record of the stop work order, spokesperson Shemeka Moore told Technical.ly. But the Department of Revenue, whose name was on an image posted to Reddit, has not yet responded to a request for clarification. 

Contacted this weekend by Technical.ly to discuss his reported dismissal, Kotay has also not yet responded. 

Prior to this summer’s arrest and last week’s firing, Kotay’s decades in the tech scene had not sparked much controversy. He spent a decade at Comcast as CTO, stepping down in 2017 to join Gopuff. He briefly left two years later for another startup, then rejoined Gopuff in January 2023.

Kotay did, however, serve as CTO for the electronic device rental company Ownable, which underwent turmoil last year. In 2023, the Securities and Exchange Commission filed a civil fraud complaint against founder Josh Verne for spending more than $9 million of the funding raised by the company on personal expenses.

It’s unclear what his departure means for the company, which became one of Philadelphia’s best-known tech unicorns just as on-demand shopping boomed during the pandemic, then pulled back with waves of layoffs as high interest rates and economic conditions dampened venture capital investment.

What we know about Kotay’s arrest 

The Hallandale Beach Police Department arrested Kotay, who is based in Florida, this past June, according to a police filing. The documents allege one misdemeanor and two felonies, including domestic violence, intent to sell methamphetamines and possession of cocaine.  Per the documents, there was a physical altercation, and the estimated street value of the drugs alleged to be on Kotay’s person was about $20. 

The $4,500 bond was posted two days after the cops booked Kotay on June 25. Kotay pleaded not guilty to each charge, according to public court records. After an arraignment on Sept. 9, the state attorney submitted discovery documents, and a pre-trial meeting will take place on Nov. 21.

Kotay’s Florida public defender and the Hallandale Beach Police Department have not responded to Technical.ly’s request for comment.

The Information first reported Kotay’s dismissal.

What this means for Gopuff

The leadership shakeup (and stop work order chatter) comes amid a tense race toward profitability at Gopuff.

Its outsized reputation in Philadelphia looms large, as a local startup success with a household name. Not everyone has been on board, though. Stakeholders have criticized Gopuff’s financial discipline, neighbor relationships and tech community engagement. 

In May, the company laid off about 6% of its 10,000-member staff, to position the company for its “next leg of growth,” the company told Bloomberg. Gopuff hopes to be profitable in the next two years.

Waves of layoffs and rumors of financial turmoil go back further.  In 2023, Gopuff laid off 2% of its workforce. In 2022, Gopuff held three rounds of layoffs and closed some of its warehouses. Despite pandemic-era hypergrowth, the company, valued at $15 billion in 2021, had to put off its goals to IPO and downsize its staff.

Many companies have gone through similar struggles since 2020, as cautious VCs have become less inclined to invest in startups, and businesses began pulling back on bold financial moves. 

Gopuff’s latest C-suite struggles appear to add a challenge, possibly complicating a potential merger, IPO or sale.