In the latest sign that investor confidence in on-demand delivery continues to skyrocket, Postmates has raised $300 million in a funding round led by Tiger Global Management. The deal values the company at approximately $1.2 billion, according to Fortune. Postmates previously raised $140 million at a $600 million valuation in 2016.
The funding comes one month after last mile competitor DoorDash raised $250 million to reach a $4 billion valuation.
With this funding round Postmates seeks to:
- Expand its available product selection;
- Broaden coverage to more than 70% of U.S. households by the end of the year;
- Launch new POS integration technologies;
- Deploy API tools such as white-glove delivery services to non-brick-and-mortar retail partners at scale; and
- Invest in R&D to devise new last mile mobility solutions.
Postmates has attracted investors with a strong growth story. The company’s gross profit growth has averaged more than 250% in the past four years, while gross margins have improved dramatically to nearly 50%, according to a company statement.
In 2017, Postmates secured perhaps its biggest retail partnership with Walmart, and also expanded its selection across companies such as Instacart, 7-Eleven, Chipotle and Shake Shack.Over the past few months, Postmates has expanded into more than 100 new cities, making it available in more than 400 U.S. cities as well as Mexico City.
Postmates says it completes “millions” of deliveries a month, generating more than $1 billion in gross merchandise volume (GMV) annually and driving profitability in 90% of its markets.
Additionally the company doubled the total number of members using its subscription service, Postmates 'Unlimited', from 2017 to 2018.
As part of the deal, Tiger Capital executive Scott Schleifer is joining the Postmates Board of Directors.