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The company is now valued at nearly $500M, and will use the funding to continue expanding
The last few years have seen an explosion in funding for on-demand services. While most of that has been fueled by ride sharing companies, with Uber and Lyft taking huge funding rounds, on-demand delivery has also become a hot space.
While others in this space try to muscle their way in, including Uber, right now the clear leader in that category is still Postmates. And now the company is solidifying its position with a big new funding round, and valuation.
The delivery platform revealed on Thursday that is has raised an $80 million funding round, led by Tiger Global Management. A Postmates spokesperson also revealed to VatorNews that Slow Ventures participated in the round as well. As part of the funding, Lee Fixel, a partner at Tiger Global, will be joining the Board of Directors at Postmates.
This new funding follows the $35 million round that the company picked up in February, and it brings the company's total amount raised to $138 million. Previous investors included Spark Capital, AngelPad, SoftTech VC, Founders Fund Expansion Venture Capital and Crosslink Capital. The company is now valued at close to $500 million.
Founded in 2012, Postmates started as a delivery service for restaurants that did not have their own services. Now, it is an on-demand delivery platform that connects customers with local couriers, who purchase and deliver goods from any restaurant or store in a city.
The company has recently been partnering with companies, including Apple, Chipotle and Starbucks.
Here's how it works: to order Starbucks, for example, all a user has to do it go through their Starbucks app, where they can then select, and tailor, their food and beverage choices. The order will be relayed electronically to the stores, and a delivery will be initiated through Postmates, to have the order picked up by a Postmares deivery persom, who will then bring it to the customer. There will likely be some type of delivery fee attached, though no details about that have been disclosed as of this time.
The company also revealed some impressive growth. It launched in 10 new markets so far this year, and recently surpassed 2.5 million deliveries across 28 markets, Bastian Lehmann. Co-founder and CEO of Postmares revealed in a blog post.
The company's gross profit is also now on track to grow by more than 10 times in 2015, compared to 2014.
The new funding will be used to further fuel the company's growth, with geographic expansion, which will include more cities in the U.S., the company spokesperson told me, as well as new categories outside of food, including pharmacy, groceries and retail.
The money will also go toward growing the team from 220 employees to 300 by the end of the year.
"We'll be hiring across the board. We're always looking for solid engineers and product people. Also, we're always growing our operations team," the spokesperson said.
This is a good time to be in the mobile on-demand space, as investment activity in on-demand mobile services rose 514% year-to-year in 2014, to hit a total of $4.12 billion, up from just $672 million in 2013.
This year is expected to be even better: with 39 deals, already half the number for all of 2014, and $3.8 billion raised, it is now being projected that venture investment to the on-demand sector is set to more than double in 2015.
In fact, the first quarter of this marked the highest quarterly funding total on record, as on demand companies raised $787 million across 22 deals. On-demand mobile companies raised over $500 million in three of the past four quarters each, without counting Uber, as the company tends to skew the results.
(Image source: blog.postmates.com)
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