The San Francisco-based startup, which lets users order food and other items online or via app and delivers them to their door, announced it is expanding into 134 new cities across the U.S., bringing the total tally of U.S. cities it operates in to 550. To put that into perspective, Postmates now covers 60% of the U.S., according to Postmates Chief Financial Officer Kristin Schaefer.
“It’s always been our mission of bringing anything anytime anywhere to all households in the U.S.,” Schaefer tells Yahoo Finance. “This expansion is just one piece of that plan. We now reach 60% of households in the U.S., and we’re moving towards 70% by the end of this year.”
That’s fast work for Postmates, which launched in 2011 and has aggressively expanded in the years since, offering delivery from merchants that sell groceries, electronics and liquor, with merchants now ranging from the local family-owned Thai restaurant a few blocks away to big retailers like Best Buy (BBY), Apple (AAPL) and Urban Outfitters.
Postmates, which has nearly 800 full-time employees, also announced in mid-September it had raised $300 million in a round of funding led by Tiger Global Management at a reported $1.2 billion valuation, ostensibly to fuel expansion efforts like this week’s. The company has raised $578 million in total to date.
On track to profitability
While $300 million is unequivocally a huge sum to raise, Postmates contends it’s already profitable in 90% of the markets it operates in and on track to full profitability. Last year, the company processed $1.2 billion in gross merchandise volume for 2017 and expects to surpass that figure for 2018. The company now processes over 3 million orders a month, with 95% of those orders having to do with food or grocery delivery, according to Schaefer.
Postmates has also been the subject of merger reports. This April, Recode reported that CEO Bastian Lehmann held talks with another on-demand delivery startup, Doordash, about a possible merger to fend off competition — a market that includes Uber Eats, Deliveroo, Grubhub, Seamless and Amazon (AMZN).
“I think everyone in this space has conversations,” Schaefer conceded. “I think it’s interesting for all the players to know each other in different ways. There’s no intention of consolidation on our part in the near term.”
Such a merger seems less likely as Postmates forges ahead beyond the 550 cities it now operates in, with Schaefer hinting plans for further expansion are in the works into countries such as Canada. The company also has its sights set on going public sometime in 2019 — a scenario Lehmann alluded to in a recent interview with Fortune.
“That’s one option that we’re looking at, that we’re interested in pursuing,” added Schaefer.
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