Addicted to Delivery

At GroundBreak Ventures, our mandate is to invest in companies that change the way we live and work, and perhaps no change has been more penetrating over the last two years than the collective move towards on-demand delivery. Same day, next day delivery, which started as a ‘nice to have’, in the retail segment via Amazon pre-COVID became almost a necessity across industries throughout the pandemic and has structurally changed consumer/client expectations significantly for the foreseeable future.

eCommerce tools and on-demand infrastructure are reshaping the supply chain and pulling forward decades of associated investment in physical infrastructure. These are trends we identified and prioritized early on with investments in Toolbx (construction eCommerce and on-demand delivery), GoFor (bulk on-demand delivery) and Fillogic (micro logistic hubs positioned strategically within shopping centers).

Our latest investment, Popcorn, is our play on the growing quick commerce segment and comes with an unconventional model, which we are referring to as Delivery 3.0. In order to deliver in 15 minutes or less AND make money, we believe you need a dynamic (not static) network, supported by data-driven, flexible pricing and inventory management. Instead of adding more and more nodes (cost prohibitive), Popcorn has made the nodes mobile with vans that are retrofitted with up to 1200 SKUs. In effect, it is a distribution network on wheels.

Why is this important? Three reasons:

1. It allows for broader geographic coverage (not limited to urban areas)

2. It allows for multi-point to multi-point delivery (no need for vans to return a central or even decentral location)

3. It allows for upsells on the fly (since the inventory is going with the vehicle, the company can serve up promotions, add-ons, etc).

As a result, Popcorn’s unit economics at scale are more than 2x those of Delivery 2.0 companies such as GoPuff, DoorDash, Instacart, etc. We are excited to be partners with NFX, Box Group, Penny Jar Capital and others as this new model unfolds. For better or for worse, the human desire for instant gratification is a powerful force driving innovation; we’ve had a taste of the on-demand world and we are addicted. Getting what we need and want in minutes vs. days is a profound change and will inevitably impact where we choose to live and work. 

Sincerly,

From your friends at GroundBreak Ventures