Favor, the Austin-based on-demand delivery startup, has closed a $22 million Series B funding round to continue its expansion in Texas and on-board 25,000 more independent contractors to make deliveries.
The new funding, led by Austin's S3 Ventures, came as the company announced it has become profitable, a rare achievement in the on-demand delivery space which is largely fueled by massive infusions of venture capital.
For a time, it looked as though Favor may have been struggling to grow rapidly as dozens of competitors crowded the space with variations of on-demand restaurant and convenience deliveries. In January, Favor shut down its operations in Toronto, Boston, Denver and several other cities it had expanded to the year prior. The company made the move to focus on key markets in Texas and expand within the Lone Star State.
“Scaling a high-touch, hyper-local logistics business is no easy task, and all the credit goes to our team’s relentless focus executing on our strategic growth plan," Jag Bath, Favor's president and CEO, said in a blog post. "Achieving profitability at this scale, and the vote of confidence from our existing investors, is validation of what we are doing and underscores the future of the on-demand economy.”
Favor's new $22 million round brings its total funding to $34 million. Other investors include Austin's Silverton Partners and Tim Draper, the Menlo Park-based venture capitalist.
To date, the company says it has completed more than 6 million deliveries, and its pace of growth has it on track to complete a total of 4.5 million deliveries in 2017 alone.
