The Philadelphia-based GoPuff delivery service, whose 200 neighborhood delivery centers across the Northeast, Midwest, and South have seen sales rocket since last spring’s coronavirus shutdowns, has agreed to buy Concord, Calif., liquor delivery service BevMo and its 161 stores in three Western states for $350 million.
The deal marks seven-year-old GoPuff’s first acquisition. It would boost the company’s workforce to more than 5,000 warehouse workers, tech, retail, and office staff — plus drivers — and increase its value, as calculated from investment and acquisition costs, to more than $4 billion, making it among the most valuable Philadelphia-based start-ups.
Its local sites include warehouse and delivery centers in college towns and neighborhoods such as University City and West Chester, and in densely populated areas such as Port Richmond, Northeast Philadelphia, and Cherry Hill. The company on Monday shut its early warehouse center and beer store at 12th and Hamilton Streets in Center City, moving services to other neighborhoods.
BevMo’s seller is TowerBrook Capital Partners, a New York- and London-based firm that has owned BevMo since 2007, according to Bloomberg LP.
The cash hoard to help GoPuff fund both new stores and acquisitions was sweetened by $1 billion in commitments from investors led by Saudi-funded, Japan-based Softbank Vision Fund last winter, plus $380 million from investors led by Silicon Valley-based Accel Partners and New York’s D1 Investment Partners last month.
“We’re proud to bring GoPuff’s operations to California and look forward to investing in talent and real estate across the state,” GoPuff co-chief executive Rafael Ilishayev said in a statement. “Through this acquisition, GoPuff will operate coast-to-coast.”
The company competes with DoorDash, Uber Eats, and Amazon’s growing local delivery service, among others.
Investors are betting that either GoPuff will keep rapidly increasing its $1.95-plus-tips local delivery orders, or it will eventually be bought by a larger service at a fat premium.
BevMo has “extremely loyal” customers in California and neighboring states, GoPuff cofounder Yakir Gola said in a statement. The service also has sites in Arizona and Washington.
BevMo chairman Cathy Stauffer said GoPuff will deliver “a superior customer experience” and a longer list of products to BevMo customers. The buyer expects to close the deal before Christmas.
Before the BevMo deal, GoPuff had been spending cash on new neighborhood warehouse locations and on poaching top staff from other online retailers. Recent hires include chief customer officer Jocelyn Wong, formerly chief marketing officer at hardware chain Lowe’s; chief business officer Jonathan DiOrio, ex-head of fintech at ride-share giant Uber; and engineering vice president Rekha Singh, a past engineering boss at Tripadvisor.
In its early years, GoPuff cultivated a marijuana-friendly image. More recently it has stressed its growing array of baby and pet products, cleaning supplies, junk food, beer, and locally sourced brands.
In Philadelphia, GoPuff says it delivers Federal Donuts, La Colombe Coffee, Famous 4th Street cookies, Federal Pretzels, Side Project Jerky, Bassett’s ice cream, and Yards, Victory, and Love City beers, among other brands.
©2020 The Philadelphia Inquirer