Third-party delivery service Postmates has raised another $225 million in funding, TechCrunch reports. The round was led by GPI Capital and brings the service’s total amount of funding to roughly $1 billion. Postmates is now valued at $2.4 billion.
The San Francisco-based company confidentially filed for an IPO in February of this year. At last check, the company will make its IPO paperwork public this month and is expected to debut on the stock exchange at some point during the fiscal third quarter of 2019.
As TC writes:
. . . last-minute financings are critical for companies poised to run out of cash and in need of an infusion prior to hitting the public markets. The motives for Postmates last-minute financing are unclear, however, the company will certainly begin trading on the stock market at an interesting time.
Postmates would follow third-party delivery rivals Grubhub and Uber Eats into the public markets. Rival and current market leader DoorDash is also rumored to be going public.
But as we’ve written before, the long-term viability of third-party delivery is still in question. Postmates and DoorDash might be valued at massive sums right now, but as a model, third-party delivery has yet to become profitable.
It’s also an almost-constant source of controversy these days. From shady tipping policies to proposed caps on commission fees, these services have received endless headlines calling into question the ethics of the model. Meanwhile, California’s Assembly Bill 5, which was just signed into law, is a major blow to companies like Uber and DoorDash and will most likely have a ripple effect across other Democrat-led states.
Recent numbers put third-party delivery app users at 44 million users in the U.S. by 2020. When Postmates lines up next to its rivals in the public market, it will also be joining the struggle to somehow turn a profit from those millions of users.