Food-delivery company Postmates files paperwork to go public

Get ready for this.
Get ready for this.
Image: Quartz/Thu-Huong Ha
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On-demand delivery company Postmates has confidentially submitted draft paperwork with the Securities and Exchange Commission (SEC) to go public, it said Feb. 7.

Postmates joins a throng of Silicon Valley startups expected to complete initial public offerings in 2019. They include Uber, Lyft, and Slack—all of which have also submitted confidential draft paperwork with the SEC—as well as Airbnb, Palantir, Pinterest, Instacart, Peloton, Robinhood, and Cloudflare, which haven’t yet announced filings.

Postmates was founded in 2011 as a number of on-demand delivery companies were getting started. The company’s bread and butter, pun intended, is delivering takeout orders from restaurants, but it also delivers from pharmacies and grocery stores. Customers place their orders through an app, and they’re fulfilled by couriers who work as independent contractors.

The company generates revenue by padding orders with extra fees, such as a delivery fee and a separate service fee (tips are also separate). Such fees can easily add up, making the final price of a Postmates order much more than the cost of its items. Postmates also offers a subscription product, Postmates Unlimited, that costs $9.99 a month or $96 a year for free delivery on orders of $15 or more from a network of over 350,000 restaurants. The company’s biggest market is Los Angeles.

In December, Postmates unveiled a delivery robot, Serve, that it said could carry 50 pounds (23 kg) and go up to 30 miles (48 km) on a single charge, and navigate sidewalks. Serve in theory could help Postmates reduce labor costs by replacing human couriers.

Postmates, like many on-demand companies, has struggled to make its business model work. Co-founder and CEO Bastian Lehmann said Postmates would achieve profitability in 2016, 2017, and 2018, but it’s unclear if the company ever actually made good on that promise. Postmates most recently raised $100 million in January from investors including BlackRock, the world’s largest asset manager. Some interpreted that deal as a chance for existing investors to duck out ahead of a public offering.