Softbank-backed digital convenience store GoPuff has raised $1.15 billion in capital as it races to compete in the red-hot delivery wars against larger rivals like DoorDash, Postmates and Instacart.
The latest round, announced on Tuesday, more than doubles its valuation to $8.9 billion, up from $3.9 billion just last October. It brings the eight-year-old company’s total funding to roughly $2.5 billion.
GoPuff received backing from existing investors like SoftBank Vision Fund, D1 Capital Partners and Luxor Capital, as well as new investors like Fidelity Management and Research Company, Baillie Gifford and Eldridge. Accel, one of its earliest and most prominent investors, did not participate in the round.
The company said the capital will be put toward geographic expansion both in the U.S. and internationally, the introduction of new product categories available on its app and further investment in technology and hiring.
GoPuff was started in 2013 by two Drexel University students, Rafael Ilishayev and Yakir Gola, to deliver late-night snacks to their classmates. It has since expanded to 650 cities and offers over 4,000 items—ranging from ice cream and beer to over-the-counter medicine and laundry detergent—delivered in around 30 minutes for a flat $2 fee. It operates like a retailer in that it purchases products and fulfills orders out of its own network of 250 miniature warehouses.
In November, it acquired liquor store chain BevMo! for $350 million to fast-track its presence on the West Coast. It also, crucially, gave it the ability to immediately sell one of its best-selling products: alcohol. Otherwise, GoPuff would face the task of securing liquor licenses in new markets one by one.
The company has benefited during the pandemic as customers turn to delivery apps to summon items to their doorstep, with orders rising 400% in the first half of last year. However, it also faces intense competition in a crowded delivery space, which is dominated by larger players like Amazon, DoorDash, Postmates and Instacart. Earlier this month, Instacart said it raised another $265 million, doubling its valuation to $39 billion. DoorDash raised around $2.5 billion before going public in December; it currently sports a market capitalization of around $44 billion. Postmates was acquired by Uber last year for $2.65 billion.