Why We Invested In TheGoodz
Reach out to Brett Calhoun, Managing Director & GP at Redbud VC, at brett@redbud.vc to learn about Redbud, and subscribe to our newsletter here.
💡 TheGoodz delivers convenience store essentials in under 25 minutes. The team has built a profitable operation by first segmenting the college demographic, leading to better inventory management, decreased customer acquisition costs, and faster delivery times.
Investment Premise
Unlike the average shopping trip that takes 41 minutes, instant delivery is the number one reason why consumers order online. When shopping for essentials could take hours per week, the future of shopping will be ultra-convenient (i.e., less than 30-minute delivery) and provide personalized SKUs based on shopping habits.
Before the pandemic, only 6% of people permanently worked remotely; now, roughly 25% of the workforce does. Due to this trend, the pandemic nearly doubled the platform-to-consumer delivery industry. Not only does instant delivery free up consumers to spend their time on things they care about more than shopping, delivery also promotes safety. For example, on average, 28 people die daily from drunk driving and there are over 300k alcohol-impaired driving episodes yearly. TheGoodz wants to decrease these numbers and will deliver alcohol straight to the person unlike some other delivery services.
While instant delivery giant, Gopuff, raised roughly $2.5B in funding during the pandemic and increased its user base by 766% unfortunately, they focused more on revenue rather than infrastructure. To start 2022, the company laid off 3% of its workforce (i.e., 450 employees) potentially signaling an impending implosion. The company wastes up to $10K of food per week per location due to inaccurate inventory management, has poor incentives aligned with its workforce, and continues to burn cash with a $500M loss in 2021. It’s only a matter of time that Gopuff’s internal issues and inability to churn a profit will kill the company.
Redbud invested in TheGoodz because the founders are principled Midwest operators who have built a scalable model for a targeted audience. The differentiator between their company and other delivery services is that they can provide more efficient and profitable delivery services through customer segmentation. The team promotes a culture of safety with a higher guaranteed hourly pay for its drivers and a manageable delivery radius (drivers will deliver up to 5 orders within 4.4 miles of the fulfillment center to maintain less than 60 minutes of transportation). TheGoodz also maintains disciplined inventory management and provides a white glove service by only targeting college campuses.
This discipline has led to zero employee turnover, kept return rate of less than 1%, avoided fraud or stealing, and more than doubled customer retention compared to the industry. While working a full-time job and bootstrapping the company,
Landon Moore, CEO of TheGoodz, has grown the business in under 12 months to ~$70k in monthly revenue and thousands of customers. Most importantly, the founding team of operators and engineers care about delighting their customers and employees first.
Reach out to Brett Calhoun, Managing Director & GP at Redbud VC, at brett@redbud.vc to learn about Redbud, and subscribe to our newsletter here.
