Gopuff has grown at a breakneck pace since its inception almost 10 years ago, but the scene on 6th and Callowhill streets on Tuesday was indicative of how the company is shifting its strategy.
Gopuff co-CEOs Rafael Ilishayev and Yakir Gola joined Mayor Jim Kenney and Councilmember Mark Squilla to mark the local unicorn's 10 millionth delivery in Philadelphia, the opening of its new micro-fulfillment center and the launch of a new plant-based snack brand. The debut of the new Northern Liberties facility comes just months after layoffs signaled a change in direction for the company.
The Philadelphia startup reportedly laid off 10% of its global workforce, or about 1,500 employees, in July and closed 76 warehouses after growing at full tilt since its founding in 2013 at Drexel University. In an interview with the Business Journal on Tuesday, Ilishayev said the company is taking "big, bold steps — frankly, uncomfortable steps" with the goal of getting back to profitability in 2024.
So what does that path look like?
"Continue to introduce new assortments, we'll open up buildings where it really makes sense for us to open up buildings in key locations like Philadelphia, and we'll continue to optimize and use all of our existing Gopuff assets," Ilishayev said.
The company still wants to grow, especially in Philadelphia, where it employs between 650 and 700 people, Ilishayev said. Philadelphia is the delivery platform's top market nationally, and it's working to keep up with that demand. In addition to the new fulfillment center at 6th and Callowhill, Gopuff is also expanding to a larger facility in West Philadelphia after it closes an existing warehouse on Chestnut.
"This building was very much well-needed, we're kind of busting through the seams at all of our other buildings," Ilishayev said. "This will alleviate a lot of volume in other buildings and help us continue to grow. You need the capacity and throughput for a city to be able to thrive. This is a much larger format building than what we're used to, but because of the rate of Philadelphia's growth it was important for us to open up a building that can meet that."
However, Ilishayev added that "we're not going to be opening up buildings as much as we were opening up buildings before."
Larger warehouses are one way Gopuff is looking to grow in its own backyard. Another strategy for companywide growth is on the assortment side and adding new product lines. Gopuff launched a plant-based snack food brand called Good Eat’n last week, it's own private label Basically in January and Gopuff Kitchen last July, for example. The company has plans to continue expanding owned lines.
"We're going to continue to introduce new categories," Ilishayev said, adding that sales from the Gopuff Kitchen business have grown substantially each week since it launched. He said they want to "maximize" and "build" on the assortment side of the business.
Another way the company could grow is through acquisitions. Gopuff acquired California-based alcohol retailer Bevmo in 2020 and Kentucky-based chain Liquor Barn last June. That may be a sign of things to come.
"We're always looking at the alcohol space," Ilishayev said. The local mom-and-pop, small chains, things to continue to expand our footprint from an alcohol licensing perspective."
The company, which has a $15 billion valuation, was reportedly prepping for an IPO in January, but plans have since changed due to "rough" capital markets. Ilishayev said getting back to profitability will be the key to exploring an IPO and that when the capital markets open Gopuff will look at going public as an option.
"Thankfully for us, we have a massive balance sheet and the ability to keep private for as long as we wish to stay private," Ilishayev said. "We'll continue to evaluate. As the macro changes, our opinion will change."
