Gophr Secures £4m Funding for Last-Mile Delivery Expansion

Gophr Secures £4 Million Investment to Fuel Product Development

Gophr, a last-mile delivery service operating in the U.K., has successfully raised £4 million in a new funding round. This capital injection will be directed towards enhancing the company’s product offerings, following a period of substantial growth.

Funding Details and Previous Rounds

The investment round was spearheaded by Nauta Capital, a prominent pan-European B2B investor. Prior to this, Gophr had secured £1 million across two earlier funding stages, including a £500,000 investment from Auctus Alternative Investments, a publicly traded firm.

Profitability and Market Position

Gophr’s co-founder and CEO, Seb Robert, revealed that the company achieved monthly net profitability approximately three years ago. Notably, the business maintained net profitability throughout the entirety of the previous year. While benefiting from increased demand during the pandemic, Gophr is now focused on accelerating its expansion.

Delivery Volume and Client Base

To date, Gophr has facilitated over 2 million same-day deliveries. The company serves a diverse clientele, including well-known consumer brands such as HelloFresh, Boots, Co-Op, and Selfridges. Gophr currently boasts a total of 5,000 clients and provides services in the majority of U.K. cities.

Lessons Learned from Past Delivery Startups

Robert emphasized the significance of achieving net profitability before seeking further funding. He recalled the failures of numerous delivery startups in recent years, where substantial investment was lost due to unsustainable business models. Companies like Jinn and Valk Fleet serve as cautionary examples.

A Sustainable Business Model

“A model demonstrating actual profitability,” Robert stated, “has a greater likelihood of attracting investment.” He also observed a resurgence in venture capital interest within the last-mile delivery sector, but cautioned that many new entrants appear to be replicating the strategies of the previous generation of startups.

The Challenge of Empty Returns

Robert questioned the viability of ultra-fast delivery services, highlighting the inefficiency of couriers returning empty-handed. He noted that this practice consumes both time and resources, and its long-term sustainability remains uncertain.

Competition and the Rise of Quick-Commerce

This observation is potentially a critique of emerging startups adopting models similar to Instacart, like Getir, or the proliferation of delivery-only “dark stores” such as Gorillas, Cajoo, Dija, Zapp, Weezy, and Fancy.

The Importance of the Human Element in Delivery

Despite advancements in drone and autonomous vehicle technology, Robert underscored that the delivery business, particularly last-mile delivery, remains fundamentally reliant on people. He stressed the importance of creating a service that adequately supports and values its couriers.

Stripping Out Compromises in Service

“Same-day delivery at scale presents significant challenges,” he explained, “leading many companies to cut corners.” He contrasted legacy companies, which achieve scale but compromise service quality and exploit couriers, with tech startups that prioritize app experiences but lack sustainable delivery practices.

Maximizing Courier Earnings and Efficiency

“Our platform is designed to maximize each courier’s earning potential, regardless of their travel direction, while ensuring timely and reliable delivery for customers,” Robert explained.

Courier Development and Platform Capabilities

Gophr has developed a platform intended to facilitate courier “leveling up”. This involves a thorough understanding of the complexities inherent in the delivery process, including individual courier preferences and varying customer expectations across different sectors.

Couriers as a Key Asset

“We view the courier not as an incidental component, but as a crucial asset,” Robert stated. “Our focus is on empowering them and continually improving their experience.” He emphasized that successful delivery extends beyond simply being on time, encompassing adaptability to diverse customer needs and effective communication.

Response to the Uber Worker Classification Ruling

Robert welcomed the recent U.K. court ruling reclassifying Uber drivers as workers, granting them additional benefits and protections. He believes this decision will help eliminate exploitative self-employment practices within the delivery industry.

Worker Status and Future Compliance

“We foresee that the U.K. delivery industry will need to adopt this new worker classification to remain compliant with the law,” he said. He acknowledged that some companies might attempt short-term mitigation strategies, but doubted their long-term viability.

A People-First Approach

“We’ve always considered our couriers as ‘talent,’ not a cost center,” Robert affirmed. “We prioritize building a strong relationship between the courier and the client, with our platform serving as an enabler, not a gatekeeper.”

Transparency and Control for Couriers

Gophr’s app provides couriers with complete information about each job – pickup and delivery locations, consignment details, and payment – before they accept it. The company does not penalize drivers for declining work.

Rate Setting and Avoiding a “Race to the Bottom”

Robert noted the interesting aspect of the Uber ruling regarding rate setting, suggesting that centrally imposed rates can actually benefit couriers by preventing a downward spiral in earnings. Gophr sets rates to avoid a competitive devaluation of courier services.