On-Demand Delivery Startup Aims to Replace C-stores

PHILADELPHIA — On-demand convenience store delivery service startup goPuff has received a total of $8.25 million in venture funding in its current fundraising round. The 24-hour online delivery service currently operates in nine major U.S. cities and will use the new capital in part to launch in Portland, Ore., Houston, Minneapolis and Nashville, Tenn., over the next few months.

An existing investor, Anthos Capital, recently provided an additional $5 million in venture funding. The funding will support new market entry, marketing initiatives and operational expansion, including its new 40,000-square-foot warehouse headquarters in Philadelphia, the company said. goPuff plans to roll out in at least seven more cities by the end of 2016.

"We expanded to our first three cities when we were completely bootstrapped. This additional funding is simply to accelerate our growth," stated Rafael Ilishayev, goPuff co-founder and CEO. "Ultimately, our goal is to provide the fastest and most affordable on-demand delivery option available in the market. Using technology to make our lives more efficient, goPuff is eliminating the need to visit traditional stores. Goodbye convenience store, Hello goPuff."

Ilishayev and Yakir Gola launched goPuff in 2013 and initially delivered only 50 basic products before expanding the company to a full, on-demand c-store delivery service in 2014. It has local warehouses stocked with inventory in each city in which it operates. Approximately three quarters of its sales come from food-related products

goPuff operates from noon to 4:30 a.m. in most markets and charges a flat delivery fee of $1.95, which is waived for orders over $49. It targets millennials as its primary customer base, and the current average customer age is 25 to 26 years old.

The company recently launched two subsidiaries: goBeer and goBooze.

The founders' goal wants to be the most affordable and quickest delivery service, offering convenience with no additional cost, they told The Inquirer.

"Our goal is to eliminate the convenience store," Gola said. "There is no need for them."

Consumers can download the goPuff app on iOS and Android mobile devices.

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