- 5 August 2022
- Transport / Logistics Services
In a blog on LinkedIn, fast delivery company Gopuff founder Rafael Ilishayev has defended his company’s business model after questions about the future of the industry.
The fast-convenience-and-restaurant-delivery industry grew quickly during the pandemic, but no business found a way to achieve profitability. Consequently many folded or were acquired. Those that remain are money pits for venture capital.
As it joins the scramble among remaining fast-delivery businesses to achieve some sort of profitability, Gopuff has shelved a number of new business initiatives. Some key executives have gone too. Responding to such reports Ilishayev wrote: “Since Yakir Gola and I started Gopuff nearly nine years ago, we’ve come across skepticism on the space and business model – and I understand why.
“Often, we have investors, analysts and the media asking us: why do people need ice cream in 15 minutes? Truth is – they don’t. Nobody needs ice cream in 15 minutes. Our business is far beyond that – it’s about serving the changing trend in commerce.
“We have become a culture of “when I want it.”. Consumers have been trained that they don’t have to cater to hunting for taxis, store hours or broadcast scheduling – they can do everything they want on their own time.
“Similarly – people use Gopuff not because they need ice cream in 15 minutes, but because it allows them to control their time and spend it with the people and things they love instead of going to the store. The tides of commerce are changing.
“The second most common question we get: how can a business like this be profitable…you can’t make money delivering a few items? To that end – they’re right. That is not a profitable business. It’s also not what we do.
“What we have built has taken nearly a decade. During the first three years of our business, we steadily grew while maintaining profitability without a single venture capital dollar. We used our free cash flow to expand into new markets, expand into alcohol and steadily grow our team both in our MFCs and in HQ.”
The co-CEO of Gopuff concluded (as all do) by saying that the company is still looking at ways of making a profit…