Gopuff Celebrates 10 Millionth Delivery and Opens New Downtown Delivery Center

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Gopuff, the downtown-based snack and home goods delivery company, forced to cut costs with job cuts and closures earlier this year, returned to its roots on Tuesday as founders Rafael Ilishayev and Yakir Gola have opened a new center at North Sixth and Callowhill streets.

The founders noted that the newly painted warehouse and its half-block of shelves marked an upgrade from cramped, makeshift locations in downtown Gopuff of years past, prompting complaints from traffic and noise from neighboring residents.

READ MORE: From March: Gopuff prepares layoffs as Philadelphia-based delivery service plans possible stock sale, report says

The new site is in the former Philadelphia Ball & Roller Bearing Co. building in an industrial neighborhood near where I-676 connects to I-95 and the Ben Franklin Bridge to New Jersey. The building sold for $5.1 million in late 2020 as the company, then cash-rich from investors, rapidly opened new centers.

The founders met at Drexel and started the company as college students with limited means. They offered a kind of “Wawa on wheels”, delivering snacks to students around the clock.

At a time when Amazon and other delivery services were growing rapidly, Gopuff attracted more than $1 billion from investors in Silicon Valley, New York, Japan and Saudi Arabia, and used funds to open new centers in college towns and neighborhoods of cities that attracted young people. professionals. The pandemic has further boosted delivery demand, although analysts say store reopenings and rising financial costs have dampened the near-term outlook for the industry.

“It took six years to get our first million deliveries,” Gola said. Gopuff just placed 10 million orders in Philadelphia and marked the occasion by having Sixers star James Harden make the delivery Tuesday in a Gopuff-branded car.

At Tuesday’s inauguration, Mayor Jim Kenney painted Gopuff’s early life in a romantic light. “This venture marked the beginning of Philadelphia’s ‘young-ing'” – and the return of young people and their energy to the city’s neighborhoods.

Kenney also championed the city’s “decriminalization of marijuana,” which he says helped attract the company and its young fans. It was a nod to Gopuff’s early marketing campaigns linking snack orders to pot smokers’ late-night appetites. The company has since moved away from any association with getting high.

Philadelphia has been a “model market” for the company, Ilishayev said. The original centers lacked loading docks, parking and other amenities, but “we had a lot of courage. That’s what this city stands for – a lot of courage,” he said. “Anywhere outside of Philadelphia, this business wouldn’t have been so successful.”

Earlier this year, Gopuff announced it would cut 10% of its 15,000 global workforce and 76 distribution centers in fringe markets as it seeks to mitigate losses, waiting for securities markets to improve. so it could move forward with a long-delayed initial public offering of shares (IPO) that would have enriched its early investors.

According to a Wall Street Journal report last month, Gopuff was burning more than $100 million a month more than he was bringing in before the cuts, but still had more than enough investor money to last him through the years. year. The Journal added that the company was trying to borrow $300 million to boost its cash cushion.

“When you come from a background where you don’t have money, like we do, you plan for that,” Gola said, adding that the company also has some shrewd advisors among its investors, including Japan’s Softbank and Accel Partners, based in Silicon Valley, as well as with a group of New York hedge funds.

National businesses such as Gopuff are also facing pressure from the end of COVID-related shutdowns that had sent many consumers home to order deliveries. With the return to normal, fewer people need to pay extra for delivery.

Gopuff charges $2.95 per delivery and also prices items to cover its costs. Tips are an important part of a driver’s income.

The pandemic has also given a boost to local and tech rivals, including Dan Tsao’s RiceVan and Victor Tejada’s Delivery Guys, both Philadelphia-based, as well as tech efforts like Conshohocken-based Zuppler, whose tech ordering promises lower expenses to the food suppliers who use it.

Gopuff has worked to build customer loyalty by adding new lines of branded and partner-made snacks, baby products, and “plant-based” foods such as pork-free pork rinds.

Lately, it’s become a little easier to find workers in some cities as the economy slows, he said. “We are a global company that is local everywhere.”

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