Gopuff, the instant delivery giant valued at $15 billion (and filing for financing in December 2021 at a valuation of up to $40 billion), made a name for itself courting consumers wanting groceries and other essentials with an app that lets them order and get those goods delivered in around 30 minutes. Now, as the category matures and faces a period of consolidation, Gopuff is announcing a new big-name advisor and investor — Bob Iger, the former CEO and chairman of The Walt Disney Company — as it looks to take its consumer profile to new levels.
Gopuff would not disclose the size of Iger's stake in the company, nor whether the investment is coming as a separate investment, or as part of a $1 billion round (in debt and equity) that the company is in the process of closing. (The December 2021, $1.5 billion financing was in the form of a convertible note, potentially to convert to equity at IPO to a maximum valuation of $40 billion.)
Gopuff is no stranger to celebrity endorsements and connections — a spokesperson said Iger was introduced to the co-founder CEOs Yakir Gola and Rafael Ilishayev via none other than Chris Paul, the NBA all-star who has been working with Gopuff on healthy food, diversity engagement and other initiatives for a while now — but all the same this potentially puts an interesting spin on what Gopuff is aiming for in its next stage of growth, given Iger's experience at a mega-brand where holdings span not just hospitality services (an obviously synergy) but extensive media and entertainment properties (…).
“Bob Iger is one of the most important and visionary business leaders of this generation. He defined consumer engagement, product innovation, and organizational excellence,” said Gola in a statement. “I am so proud and excited that Bob is joining team blue. Gopuff is building a platform designed for the future of the consumer industry and nobody understands consumers better than Bob Iger.”
“It’s been exciting to spend time with Gopuff leadership learning about the company, the founders, and their aspirations,” Iger said in his own statement. “I am excited to advise, mentor, and support the executive team as they continue building a company uniquely designed for how consumers are changing and growing. I believe consumer commerce will be very different in the near future and Gopuff is building the platform to power it.”
I don't typically make references to press release wording, but to me it's notable that Gopuff points out in its official announcement of the appointment that “Mr. Iger led The Walt Disney Company during the most difficult time in the company’s storied history,” going on to say that “practical concepts such as optimism, courage, decisiveness and fairness, and an ability to foster innovation while powering growth” marked his time there.
To be sure, the addition of Iger to “team blue,” as Gopuff describes it, is coming at a pretty critical time for the company and the wider category of commerce.
We have seen waves of huge funding rounds and precipitous valuations to grow what seemed like an endless pool of instant grocery startups that were capitalizing on the heady days of Covid-19 — when people socially distanced, sheltered in place, and swarmed on services like rapid delivery to get their hourly and daily fixes of consumer goods. Those many delivery companies followed suit with massive investments into growing their customer bases, subsidizing orders and splashing out on big promotional campaigns and ramping up their delivery operations and other teams.
But now, a lot of consumers returning to their “old normal”, and so those instant enterprises, and their shareholders, are sobering up.
Gopuff confirmed to us that it laid off three percent of its staff — 450 people — in late March as part of a restructuring. That came on the heels of strikes among its drivers demanding better compensation, as well as some shifts in its executive ranks. (The layoffs were reported to be in the works at the time but not confirmed by the company.)
Gopuff had originally been talking about a mid-2022 public listing but with the IPO market currently stalled out, we understand those plans are currently on hold.
That state of the public markets is more generally also causing a trickle-down effect, putting pressure on companies like Gopuff that have raised a lot of funding.
The New York Post reported in March that it and others in the space are all seeing their valuations getting slashed on the secondary market. Gopuff investors, the NYP reported, were struggling to sell at $15 billion in March (recall $40 billion was the price floated just in December).
But that was before public markets started to get really dicey in recent weeks, so it's not clear what that valuation might look like on secondary sales today. (Its investors include a number of those seeing the impacts of those devaluations, including SoftBank, D1, Guggenheim, Accel, and a number of others.)
That pressure is also leading to some major consolidation of the overcrowded instant delivery market at lower levels, too.
Just earlier this week, one of the big instant grocery companies out of Europe, Berlin's Flink, acquired a would-be rival, Cajoo, becoming the biggest instant delivery player in France. (Flink also picked up some more funding and a higher valuation, $5 billion, in the process, so it seems receding tides are not capsizing all boats.) Gopuff itself has also snapped up some smaller players, including Dija and Fancy in the UK, to expand in Europe.
All of this frames a pretty challenging picture for Iger and his management skills, not least because Gopuff has also been enhancing that picture, so to speak, with a lot of new colors.
In the last 12 months, it has launched Gopuff Kitchens, a dark kitchen enterprise for ready-made meals; an advertising business; and Basically, its own private-label brand.
(And it's worth pointing out that beyond instant commerce, there are equally challenging conditions for those looking to disrupt older models. Much-ballyhooed retail startup Enjoy just this week said it was on course to run out of money by June at the current rate of business.)
But despite all that, there remain some big opportunities to continue building and meeting consumer tastes, a fact not lost on an opportunity capitalizer like Iger. And Gopuff — which currently lays claim to being the biggest player of its kind in the U.S., with a 70% share of the market and operations in 600 locations (covering 1,200 cities) — may well be positioned to deliver on that.