Postmates

Postmates is the leading on-demand goods delivery startup in the US.¬†Although restaurant deliveries which have a high transaction frequency account for most of the company’s volume, Postmates also delivers a wide range of convenience store products from its General Store as well as products from other non-restaurant stores like Apple and 7-Eleven.

The company is riding the wave of on-demand services made possible by a network of smartphone-enabled workers. There are large companies like Uber, Google, and Amazon competing in the space, but we believe that the ultimate winner will be a focused and nimble startup. The fact that Postmates has emerged as the strongest startup in the category is why we participated in its latest $80M funding round led by Tiger Global.

We believe that there are very strong network effects in the on-demand goods delivery space. Consumers want to be where the merchants are and vice versa. And having the most consumers and merchants on your platform allows you to fulfill the most orders. This liquidity makes your platform the most attractive for delivery workers and drives down their unit costs. Postmates has already shown that it can make money on each delivery and the unit economics will further improve as it scales.

Similar to the on-demand transport space, the significant network effects in the on-demand goods delivery space make it likely that there will be a runaway market leader within 3 to 5 years. Postmates is well positioned to fill this role.