20VC: GoPuff's Rafael Ilishayev on How GoPuff Has Been EBITDA Profitable From Day 1; The Unit Economics Behind GoPuff, With Intense Competition What Happens To The Food Delivery Space & What It Takes To Launch, Grow and Maintain New Markets
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 14 June 2021
⏱️ 35 minutes
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Summary
Rafael Ilishayev is the Co-Founder & Co-CEO @ GoPuff, one of the market leaders delivering daily essentials in minutes. GoPuff's latest funding round priced the company at a reported $8.9Bn in March 2021 and to date, Rafael has raised over $2.4Bn for the company from the likes of Accel, Softbank, Fidelity, Baillie Gifford, D1 Capital and more. Rafael has scaled the company to over 550 US cities with over 7,000 employees nationwide.
In Today’s Episode with Rafael Ilishayev You Will Learn:
1.) How Rafael made his way into the world of startups with the founding of GoPuff and how he turned it from a college delivery business into a nationwide leader with over 7,000 employees?
2.) Funding: Why did Raf wait until 2.5 years into the business before raising funding? What did that time bootstrapping the business teach Raf? How did it change his thinking on unit economics? How were GoPuff able to be EBITDA profitable from day 1? How do they have such superior margins in an industry blighted by low margins?
3.) New Markets: How does GoPuff determine attractive markets to scale into? What are the leading indicators of "good markets"? What resources are required to open new markets? What is the time to breakeven on new markets? How many micro-fulfilment centres does it take to win a new market? What are the biggest challenges moving into new markets?
4.) Competition: The market has become a lot more competitive, why does Raf feel this is not a market you can win without years of experience? What have they built that other new entrants do not have? Will this be a consolidatory landscape or will many of the new entrants die? Why is Raf planning to invest hundreds of millions into Europe over the coming years?
5.) Driver Efficiency & CACs: What have been Raf's biggest lessons when it comes to driver efficiency? How many deliveries does a driver need to make in one hour for the model to work? How does Raf think about the negative network effects of the model where the more demand, the longer delivery time? How can GoPuff prevent that?
Item’s Mentioned In Today’s Episode with Rafael Ilishayev
Rafael’s Favourite Book: Trillion-Dollar Coach: The Leadership Handbook of Silicon Valley's Bill Campbell
As always you can follow Harry and The Twenty Minute VC on Twitter here!
Transcript
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| 0:00.0 | Welcome back to 20 VC with me, Harry Stebbings, and I'm so excited for the show today. |
| 0:03.6 | In many ways, this company has kind of pioneered their industry and their space, and I've been a huge admirer for a long time. |
| 0:09.0 | And so I was thrilled to get this founder and the hot seed. |
| 0:11.0 | And so with that, I'm thrilled to welcome Rafael Illashyev, co-founder and co-CEO gopuff, |
| 0:15.9 | one of the market leaders delivering daily essentials in minutes. GoPuff's latest funding round priced the company in a |
| 0:21.6 | reported $8.9 billion in March 2021, and to date, Raphael's raised over $2.4 billion for the company |
| 0:28.7 | from the likes of Excel, SoftBank, Fidelity, Bailey Gifford, D1, and more. And Raphael has scaled the |
| 0:35.3 | company to over 550 US cities cities with over 7,000 employees |
| 0:39.7 | nationwide, and I want to say a huge thank you to Jeddett Headline and to Brian Adanthos. |
| 0:43.9 | Some fantastic questions suggestions today really did make such a difference. |
| 0:47.8 | But before we move into the show today, Mercury is building full-stack banking for startups, |
| 0:52.5 | applying under 10 minutes from anywhere for FDIC-insured |
| 0:55.8 | bank accounts, physical and virtual debit cards, domestic and international wires, in integrations |
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| 1:07.0 | offer unusual features like API access, custom team management, and their newly launched Mercury Treasury, a cash management product for high-growth startups. |
| 1:15.7 | And they'll even help you build your startup with Mercury Raze, a program to connect you to Silicon Valley's top investors. |
| 1:22.0 | Head to Mercury.com forward slash sign up to apply. |
| 1:25.2 | And speaking of full stat banking there with Mercury, I have to say I just |
| 1:28.3 | love using the AngelList fund admin platform to manage my investments. The team and platform |
| 1:33.5 | with AngelList takes care of all my back office needs so that I can really focus on working with |
| 1:37.9 | great founders. Leading fund managers have made over 10,000 investments into 6,000 startups using |
| 1:43.4 | Angel List, all online and all in one place. |
... |
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