GoPuff raises $380M for expansion, names C-suite execs

Brief:

GoPuff, a delivery startup with apps and a desktop site focused on convenience store goods, raised $380 million to support its expansion and product selection, and to expand its executive team. The funding round led by Accel and D1 Capital Partners, with the participation of Luxor Capital and SoftBank Vision Fund, values the company at $3.9 billion, per an announcement.
Jocelyn Wong, the former chief marketing officer of home-improvement chain Lowe's, joined goPuff as chief customer officer. The startup also hired Jonathan DiOrio, Uber's former global head of fintech and U.S. business development, in the newly created role of chief business officer, and former TripAdvisor engineering executive Rekha Singh as vice president of engineering.
In the past 18 months, goPuff more than tripled its footprint by offering service in cities including Dallas, Miami, Detroit, Minneapolis and Houston. The startup has fulfillment centers to deliver products for a flat fee of $1.95, according to its announcement.

Insight:

GoPuff's latest fundraising round and expansion of its executive team are a sign that the delivery service has big goals as a distribution channel for marketers of products typically found in convenience stores, such as snacks, beverages and over-the-counter medication that people sometimes buy impulsively or want quickly.

GoPuff, which started in Philadelphia in 2013 as an on-demand hookah delivery service before expanding its product selection, has tended to focus on providing late-night delivery service in college towns where students keep irregular hours. With many colleges and other communities enforcing strict social distancing guidelines during the pandemic, goPuff's delivery services are well-suited for customers who are avoiding stores or are limiting in-person contact with others.

The fundraising round bodes well for goPuff as the startup seeks to expand into more markets, build out its selection and hire more seasoned management. By naming Wong as chief customer officer, goPuff is gaining an experienced marketing executive from Lowe's, which has developed a variety of marketing programs to connect with customers among sales channels that include mobile.

GoPuff has experimented with technologies to engage consumers with brands, including a collaboration two years ago with confectioner Hershey to offer a virtual reality (VR) experience in its shopping app. With its focus on delivering convenience store items quickly, goPuff's service aligns with companies like Hershey that depend on wide distribution to reach customers who have plenty of other choices for snacks if its products aren't available.