Convenience store delivery startup Lula raised has more than $5.5 million in an oversubscribed seed round, just months after closing an oversubscribed pre-seed.
Ripple Ventures, Outlander VC and Up Partners co-led the round, and a large slate of other firms jumped in, as well. SOSV, Simple Capital, Stonks.com, NZVC, EasyPost, Park City Angels, Broad Street Angels Alumni Ventures and Ben Franklin Technology Partners also participated in the round, Lula CEO Adit Gupta said.
“We were raising a lot less than this, but we got to this number because we just found the partners that we had conviction in that we wanted to bring on,” Gupta said.
Gupta declined to share the company’s valuation.
Lula offers delivery from convenience stores and bodegas through existing platforms like DoorDash, GrubHub and Uber Eats, as well as through its own platform.
The Philadelphia startup now operates in about 30 cities across the United States, and it plans to expand to all 50 states by December. Founded in 2020 by Gupta and Co-founder Tom Falzani, both Drexel University graduates, Lula last raised just under $1 million in June in an oversubscribed pre-seed round to expand to hundreds of stores.
The seed round validates Lula’s “contrarian” business model of offering convenience store delivery without building distribution centers, Gupta said. Other quick delivery companies like fellow Philadelphia startup Gopuff operate micro-fulfillment centers that have reportedly faced bloated inventory issues, resulting in thousands of dollars of food being thrown away, Business Insider reported.
The seed capital will be used to do “everything that we proved out after the last pre-seed round, times 10,” Gupta said. The funding will double Lula’s headcount from about 20 to 40 in the next year, as well as build out its tech platform, kick off a marketing campaign and expand the number of convenience stores Lula has under its umbrella.
Lula is on track to operate in at least 2,000 stores by the end of 2022, Gupta said, which would grow the startup’s footprint roughly tenfold in about one year. Lula was operating in at least 200 stores at the end of 2021, and the startup is increasing its store count by 20% to 50% month over month, he said. Gupta declined to disclose the number of stores Lula works with currently, citing a large pipeline of potential clients that could dramatically increase its store count.
The startup has had interest from large convenience store chains located in the United States and internationally in countries including the United Kingdom, Canada and Mexico. Lula is focusing on domestic growth before moving its services internationally.
Gupta declined to share Lula’s revenue figures. Stores using Lula make $1,000 to $3,000 each month, he said.
Lula’s rapid fundraising streak could continue in 2022 as the startup eyes a Series A. The startup has had interest from a number of “tier one” venture capital firms that want to lead the round, and Lula is looking for investment partners that believe in digitizing brick-and-mortar infrastructure, Gupta said.
“We think that it’s important to grow sustainably,” he said. “We are just making sure that we're able to blitz scale appropriately, and we'll go out and raise the next round when we feel like we found the right partner.”
