Postmates Raises $300 Million, Joins Unicorn Club
Last year, the company reported more than $1 billion in gross merchandise volume.
On-demand delivery startup Postmates raised a whopping $300 million in venture funding to accelerate its growth across the U.S. Tiger Global led the round, and the deal values the company at approximately $1.2 billion, according to a source familiar with the situation.
“We didn’t have plans to raise additional capital,” Postmates CEO Bastian Lehmann told Term Sheet. “Tiger Global approached us and said it’s time to put some more gas in this machine. So we decided to show everyone what we could do if we invest a bit more heavily in growth.”
Last year, the company reported more than $1 billion in gross merchandise volume (the total sales volume of food and other goods ordered on the Postmates platform). It completes more than 3 million deliveries per month, and claims it’s contribution margin-positive in 90% of the markets it operates, meaning it’s profitable on a per-order basis.
“We have a beautiful path to an IPO in 2019,” Lehmann said.
This might all sound like good news for the newly-minted unicorn, but it certainly hasn’t been a smooth ride. In October 2016, Postmates raised a flat round and met a tough fundraising environment as investor enthusiasm for delivery startups waned. At the time, Lehmann said it was “a super, super difficult fundraise” and joked with Fortune that “flat is the new up.”
But time passed, market conditions changed, and the on-demand delivery economy began heating up again. As my colleague Adam Lashinsky recently put it — ”Delivery, of all things, has become the global investment flavor of the month.”
Now, mega-rounds are the new normal for the biggest players in the on-demand delivery space. You don’t need to look too far to understand the reasoning behind Postmates’ fresh round of funding. Its rival Doordash announced two back-to-back rounds — a $535 million investment from SoftBank, Sequoia, and GIC in March and then an additional $250 million from Coatue Management, DST Global, and several others in August. The most recent funding values DoorDash at $4 billion.
Suddenly, Postmates’ close rival gained a massive capital advantage from none other than the 800-pound gorilla, SoftBank. When asked whether he had conversations with investors from the Vision Fund, Lehmann said, “I don’t want to comment on specifics, but people know each other — specifically in the Valley. I think Softbank is a great firm, and I have nothing bad to say about them, and that’s probably as much as I’d like to comment on that.”
Meanwhile, rumors swirled that Postmates discussed a merger with DoorDash in order to fend off competitors such as Uber, GrubHub and Amazon. When asked about whether those conversations took place, Lehmann paused and said, “Everyone knows each other, and it’s normal to have conversations, but now you have a situation where all the players are very well-capitalized.”
He added that it’ll take a few years for Postmates and its competitors to “figure out how we want to position ourselves in the market going forward.”
To put my merger questions to rest, Lehmann insisted he is serious about a 2019 IPO: “Listen, I’m an immigrant, and I came to this country to launch the Postmates business. My dream is to run a publicly-traded company.”
This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.