Postmates, one of the leading companies in the so-called on-demand economy, has confidentially filed to go public, Bloomberg reported. The success of the IPO, to be underwritten by JPMorgan and Bank of America, will be a bellwether for the rest of the on-demand economy, which has generated wildfire enthusiasm from consumers but uncertain profits.
There’s nothing more hyperlocal than the on-demand class of startups, which feed off the everyday use cases spurred by a mobile-first world: whipping one’s phone out to order food from a local restaurant (Postmates, GrubHub, DoorDash), hail a ride (Uber and Lyft), or cut out a trip to the grocery store (Instacart, Shipt). Postmates’ founding ingenuity was to apply the convenience of ride-sharing to product delivery. Eight years later, it’s a food-delivery powerhouse, and its value may strike nearly $2 billion.
Postmates’ rise has been consolidated by partnerships with A-list companies in tech and retail. It delivers groceries for Walmart and tech necessities via Apple. It has also sought to capitalize on growing consumer trust in what is no longer a nascent brand, offering a subscription service that offers free delivery for a $10/month subscription.
Postmates will go public in the same year as on-demand giants Uber and Lyft. By 2020, we may better understand just how durable the on-demand model, supported by public buy-in and not just VC dollars, is.
Joe Zappa is Street Fight’s managing editor.