(Bloomberg) – GoPuff, a delivery startup backed by SoftBank Vision Fund, said it’s buying brick-and-mortar liquor retailer BevMo! for about $350 million.
The all-cash deal give GoPuff an entry to the California market, according to a statement confirming an earlier report by Bloomberg News. GoPuff plans to make its app available in the state early next year, according to people familiar with the company’s plans who asked not to be identified.
The deal unites a startup focused on the delivery of everyday items from cleaning products to snacks with a physical retailer. GoPuff already delivers alcohol, according to its website.
The acquisition also gives GoPuff more scale in a crowded delivery space for everyday goods, where consumers can choose to order from rivals such as Amazon.com Inc., DoorDash Inc., Instacart Inc. and Postmates Inc. Postmates agreed in July to be acquired by Uber Technologies Inc.
BevMo!, based in Concord, California, has 161 stores in California, Arizona and Washington, according to the statement.
“They have an amazing loyal customer base,” GoPuff co-founder and co-Chief Executive Officer Yakir Gola said in the statement. He said that the deal was unrelated to Proposition 22, passed by California voters Tuesday to override a state law requiring on-demand delivery businesses to treat contract drivers more like regular employees.
BevMo! is backed by private equity firm TowerBrook Capital Partners, which acquired it in 2007, according to a statement at the time. Its stores also sells non-alcoholic drinks, accessories, cigars and other items.
The acquisition would be the largest and first acquisition to date for GoPuff, according to data compiled by Bloomberg. GoPuff was valued at $3.9 billion last month when it raised $380 million from investors. In addition to SoftBank Vision Fund, the Philadelphia-based company is backed by Accel, D1 Capital Partners and Luxor Capital.
GoPuff, the business name of GoBrands Inc., delivers thousands of products from ice cream to cleaning products for a flat $1.95 delivery charge.
It was founded in 2013 by college students in Philadelphia who wanted to make it easier to get convenience items like munchies delivered. It now additionally operates in Chicago, Boston, Denver, Dallas and other cities throughout the U.S.
While the app looks similar to Postmates and other delivery apps, its business model differs. GoPuff acquires its inventory and delivers these items directly to consumers, rather than having restaurants and stores serve as intermediaries.
That cuts delivery times and makes its business model more efficient, Gola said. While GoPuff takes on the added risk of acquiring inventory, it turns it over quickly, he said.
Evercore Inc. advised GoPuff on the transaction. BevMo! was advised by JPMorgan Chase & Co.