To Expand Into Seattle And Beyond, Postmates Has Raised $5 Million From Founders Fund And Others

Next Story

ReadWrite Editor-In-Chief Dan Lyons, A.K.A. Fake Steve Jobs, Is Leaving For Hubspot

Mobile delivery startup Postmates is gearing up for expansion, and it’s raised a bit of funding to help it along the way. The company, which recently opened for business in Seattle, has raised $5 million in new funding to aid in its expansion, TechCrunch has learned. Sources say the round was led by Founders Fund, with follow-on participation from angel investor Scott Banister, among others.

Representatives from Postmates wouldn’t comment on the round, but the new funding is not surprising, particularly as the company adds employees to lead its operations in new markets. The company wants its ‘Get It Now’ app to be the go-to delivery service for its users to get anything delivered in their city, whether it be food, groceries, or even electronics from the Apple Store.

But so far, the app has only been available in two cities — San Francisco and Seattle. And it launched in Seattle just a month ago, after a lengthy but extensive test run in San Francisco. The company has about 200 Postmates couriers in its home market, making thousands of deliveries a week. In Seattle, it had just 35 couriers at launch, but is looking to quickly add more as it ramps up service there.

Once Postmates refines its service in Seattle, we expect the company to add more cities over the coming months, as it seeks to introduce its one-hour delivery service in other parts of the country. When I spoke with co-founder Bastian Lehmann around the time of the Seattle launch, he said that if all went well, the company could launch its third market in April.

So what does the company consider when entering new markets? Back then, Lehmann told me it looks for a highly compressed metropolitan area (duh), and a high penetration of Zipcars, among other things. In other words, it looks for markets where people are packed in close but don’t necessarily have transportation of their own to pick up food or whatever across town.

Postmates is following a number of other startups seeking to enter new markets with on-demand services powered by web and mobile apps. Most notably, transportation apps like SideCar and Lyft are seeking to plant a foothold in new cities. And of course, there are companies like Uber and TaskRabbit, which also expanded city-by-city over the past few years. In all these cases, operations and nailing the culture and consumer experience are paramount to success. A little extra funding doesn’t hurt either.

Postmates had previously raised $1.75 million in seed funding from a list of investors that included Scott Banister, David Wu, Thomas Korte, Naval Ravikant, Russell Cook, Russel Simmons, Walter Lee, Andy McLoughlin, Paige Craig, Jawed Karim, AngelPad, SoftTech VC, Matrix Partners and Crosslink Capital.