Gopuff co-founder Rafael Ilishayev has defended his company’s business model on LinkedIn following questions regarding the future of the quick commerce sector.
While during the pandemic lockdowns quick commerce firms experienced exponential growth, many have since either been acquired or folded completed as the easing of restrictions saw demand decrease.
It was recently reported that Gopuff had shelved new business initiatives, with claims that it had lost key executives and money. Responding to such reports Ilishayev wrote: “Since Yakir Gola and I started Gopuff nearly nine years ago, we’ve come across skepticism on the space and business model – and I understand why.
“Often, we have investors, analysts and the media asking us: why do people need ice cream in 15 minutes? Truth is – they don’t. Nobody needs ice cream in 15 minutes. Our business is far beyond that – it’s about serving the changing trend in commerce.
“We have become a culture of “when I want it.”. Consumers have been trained that they don’t have to cater to hunting for taxis, store hours or broadcast scheduling – they can do everything they want on their own time.
“Similarly – people use Gopuff not because they need ice cream in 15 minutes, but because it allows them to control their time and spend it with the people and things they love instead of going to the store. The tides of commerce are changing.
“The second most common question we get: how can a business like this be profitable…you can’t make money delivering a few items? To that end – they’re right. That is not a profitable business. It’s also not what we do.
“What we have built has taken nearly a decade. During the first three years of our business, we steadily grew while maintaining profitability without a single venture capital dollar. We used our free cash flow to expand into new markets, expand into alcohol and steadily grow our team both in our MFCs and in HQ.”
The co-CEO went onto stress that Gopuff plan to continue to “drive profitability across our entire model”. He said that no other quick commerce company has figured out how to achieve this yet, and claimed the businesses in trouble had failed to “nail their business model before scaling”.
Ilishayev concluded that Gopuff will continue to “revolutionise commerce…..far beyond 15-minute ice cream”.
