Postmates has filed for an initial public offering, joining a queue of app-driven companies ramping up to go public this year.
The food-delivery company submitted its IPO filing confidentially to the U.S. Securities and Exchange Commission, the company said Thursday in a statement, confirming an earlier story by Bloomberg. The size and price range for the proposed offering haven’t been determined, the company said.
Postmates has picked JPMorgan Chase & Co. and Bank of America Corp. as its lead underwriters for the offering, according to people familiar with the matter who asked not to be identified because it was private. The company could be valued in an offering at more than $1.85 billion, the valuation it got in January when it raised $100 million from existing shareholders and BlackRock Inc., the people said.
The listing will test public market investors’ appetite for the mobile-ordered restaurant-meal delivery business, which Postmates pioneered less than a decade ago. The business has proven wildly popular, while remaining so far mostly unprofitable.
Postmates launched in 2011, after co-founder Bastian Lehmann—now chief executive officer—got the idea to use ride-hailing cars to transport things rather than people. The company started by hiring gig-economy workers to use their cars and bikes to courier everything from flowers to furniture. Postmates quickly realized its sweet spot was shuttling meals for restaurants that couldn’t afford to hire their own full-time delivery staff.
The business grew quickly after celebrities such as Kylie Jenner and Serena Williams publicly praised its speedy delivery and convenience. In Los Angeles, Postmates is the most popular on-demand food delivery service, with a market share of 42.6% in December compared with 24% for GrubHub, according to data provided by the consumer analytics firm Second Measure.
In 2016, the company launched its Postmates Unlimited subscription service. For $9.99 a month, users get free delivery on restaurant orders over $15. The average Postmates Unlimited user spends more than $3,000 a year on meal deliveries, a person familiar with the business model said.
In September, Postmates raised $300 million from Tiger Global Management LLC, which allowed the meal delivery company to expand into more cites. That month, Postmates said it had record growth in 2018. It said its delivery logistics network, with 240,000 couriers in 550 American cities plus Mexico City, was able to reach 70% of U.S. households.
Several on-demand meal couriers have emerged since Postmates opened. They include DoorDash Inc. and UberEats, a subset of the ride-hailing giant. In the second half of last year, Postmates’s sales grew faster than UberEats in the U.S., according Second Measure.
Postmates’s listing plans coincide with several possible IPOs by marquee technology firms including Uber Technologies Inc. and its smaller ride-hailing rival Lyft Inc., which are also based in San Francisco. Uber could be valued at as much as $120 billion, a person familiar with its plans has said.