Instant delivery startup Gopuff has reportedly raised up to $300 million in debt funding

Gopuff, an instant delivery startup that received a $15 billion valuation last year, is reportedly looking to raise up to $300 million in new debt funding.

The Wall Street Journal reported the news today, citing sources familiar with the startup’s plans.

Gopuff, incorporated as GoBrands Inc., operates a so-called instant delivery platform through which consumers can purchase groceries and other items such as appliances. Gopuff delivers items to consumers within 30 minutes of purchase.

The startup offers fast delivery times using logistics hubs it calls micro-fulfillment centers. Gopuff’s logistics centers are located close to consumers, allowing the startup to provide faster shipping times than traditional food delivery apps. Also, Gopuff would have sources goods from vendors in a way that allows it to quickly adjust its product catalog as customer buying preferences change.

Gopuff operates hundreds of micro fulfillment centers and offers its platform in over 1,000 cities. The startup has rapidly expanded its logistics network over the past few years using the approximately $3.4 billion in venture capital funding it has raised from investors. Along the way, Gopuff’s valuation hit $8.9 billion last March and would have jumped to $15 billion three months later.

Gopuff is reportedly close to securing the debt financing of up to $300 million that he is seeking to raise. According to today’s report, the startup intends to raise funding in the form of a revolver loan. A revolver loan is a line of credit that allows businesses to borrow funds at any time up to a certain predetermined limit.

Gopuff reportedly raised the funding after delaying a planned stock market listing that would have taken place this year. An investor in Gopuff, Fidelity Investments Inc., reportedly reduced the value of its stake in the startup by nearly 50%.

Today’s report cites sources as saying the startup generated a loss of $400 million in the first three months of 2022. Daniel Folkman, Gopuff’s senior vice president of business, told the Journal that the he increase in spending was the result of investments in growth initiatives.

The startup has since cut expenses by implementing cost-cutting initiatives, the executive added. gopuff laid laid off 10% of its workforce, i.e. approximately 1,500 employees, in June. The startup at the time also announced its intention to close 76 of its logistics hubs.

As a result of cost reduction initiatives, Gopuff’s margins are reportedly improving. The startup estimates that its balance sheet capital, which stood at around $1.5 billion in April, is sufficient for four years.

The debt funding of up to $300 million that Gopuff is seeking to raise would further extend its runway and potentially give the startup more flexibility to invest in new growth initiatives. Earlier this year, Gopuff extended its reach by making its platform available in France. More recently, the startup added a set of new marketing features to its Gopuff Ads service, which allows companies to place advertisements within the interface of its delivery platform.

Image: Gopuff

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