Convenience store delivery startup Lula is on its way to raising more capital as it continues to make deals with major distributors just months after a pre-seed round.
Lula opened a seed round on Wednesday, Co-founder Adit Gupta told the Philadelphia Business Journal. The Philadelphia company raised an oversubscribed pre-seed round in June, which netted the startup just under $1 million. Gupta declined to disclose how much Lula is looking to raise in the current seed round.
Lula, founded by Gupta and fellow Drexel graduate Tom Falzani, offers delivery from convenience stores and bodegas through existing platforms like DoorDash, GrubHub and Uber Eats, as well as through its own platform. The seed round will be used to scale Lula by adding new stores and reduce pain points in the delivery process, Gupta said. That includes improving the technology that powers Lula, hiring more team members and improving customer service.
The startup now has close to 20 employees across seven countries.
“We've proven it out with a few deals and a few partnerships and with the unit economics,” Gupta said. “And we've figured out, in order to replicate this at a larger scale, exactly what are the resources we need to get there — to get to about 1,500 to 2,000 convenience stores nationally.”
The launch of the seed round comes shortly after Lula announced a collaboration with National Convenience Distributors, a wholesale distributor with more than 14,000 clients across 11 states. The deal will help Lula convert National Convenience Distributors’ clients into “micro-fulfillment centers,” onboarding them onto Lula’s delivery platform and helping them sell more through delivery.
Partnering with distributors helps convenience store clients to sell more products, which leads to increasing sales and turnover for distributors, Gupta said.
The deal with National Convenience Distributors will also help add more stores to Lula’s network. The startup has about 120 stores using its service now, Gupta said. He anticipates having 200 by the end of the year, blowing past initial projections of 125 to 150 stores.
Lula is now in talks with potential clients that own chains of 20 to 50 stores, which could dramatically increase the number of locations in its delivery network.
Lula is also in conversations with a major delivery platform to expand its reach to both convenience stores and potential customers, Gupta said. He declined to disclose which platform is involved.
“We’ve found a lot of traction and product market fit in this direction,” Gupta said. “And we're just digging deeper and moving quickly.”
