This year has proven to be the year of important initial public offerings and many more are in the pipeline. Another highly interesting IPO that is in the works is that of American delivery startup Postmates. The company is expected to go public later this year.
Considering this fact, many more big-ticket tech IPOs are going to take place in 2019. It is interesting to see the merits of investing in Postmates and other delivery technology stocks. So, it is worthwhile to take a better look at companies cornering a number of market segments in North America.
A Market Getting Warmed Up
This segment of the market is still relatively new compared to other parts of the “tech world.” Companies like DoorDash, UberEats (UBER), GrubHub (GRUB) and others have joined the ranks of other unicorn startups, with a valuation of $1.85 billion. However, the future of the delivery tech industry is bright and according to estimates by some experts. It is believed that it could one day be valued at $100 billion.
For many, the challenge is to fight against established rivals and try to increase market share steadily, in order to become one of the bigger players in the industry. So how can companies like Postmates (soon to IPO) and others compete? Do something that isn’t already being done!
New Services Will Create Opportunities…cough cough…Cannabis
Although, it can be argued that there is not much that separates one delivery app from another, it needs to be mentioned that certain companies have managed to offer particular services that could help in gaining a competitive edge. For instance, two of the fastest growing industries right now in the United States are on-demand technology and cannabis. These two industries are at the epicenter of growth and investors aren’t being shy about their appetite for companies in these arenas. But one company, in particular, has developed a unique business model that services both of these massive growth industries.
Special Report: Two Massive Growth Industries, One Choice for Investors
Driven Deliveries (OTC: DRVD) is quickly gaining steam in legal US markets as the new delivery option for customers is resulting in increased revenue and transactions for dispensaries. According to Statista , the United States legal cannabis market is projected to be valued at $24.1 billion by 2025. And a recently introduced bill to Congress could catapult the industry to those record levels even quicker than originally expected.
A Focus On Expansion
Driven Deliveries (OTC: DRVD) announced in mid-2019 that it has successfully launched operations in Nevada with Shango Marijuana Dispensary, one of the most successful stores in the State. The new endeavor provides Driven with a monumental opportunity to serve Las Vegas, the largest market in the State with massive tourism, and a central launch point for additional markets throughout Nevada.
Why Nevada? The Nevada cannabis market has been growing at a rapid pace. Nevada retailers sold approximately $530 million worth of medical and recreational cannabis in 2018*. The $44.1 million in monthly revenue represents a 35% increase when compared to monthly revenue in 2017.
Driven Deliveries (OTC: DRVD) may have also recently secured $2.5 Million in annual revenue and could significantly expand its product offerings! How? The company has signed a Letter of Intent to acquire cannabis retailer, Mountain High Recreation (MHR). Read More: Driven Deliveries Inc. (DRVD) Signs LOI to Acquire Cannabis Retailer, Mountain High Recreation
New Trends Signal “More Than Just Food Delivery”
As we’ve already seen, there’s far more than just food that these companies are focusing on. Just as with Driven Deliveries (DRVD), Post Mates is going beyond things like bringing you your Double Decker Burger. But instead of things like cannabis, Postmates also delivers groceries and alcohol from nearby stores to its customers.
In addition to that, it has inked some partnership deals that have brought down the cost of delivery as well. If it continues in the same vein and manages to innovate, then it could make it an attractive proposition for investors. The company has increased its presence considerably over the year and currently serves as many as 3500 cities spread across 50 states in the United States and in 2018; Postmates generated revenues to the tune of $400 million.
Talking about its key partnerships, it is important to point out that back in March, the company teamed up with payments company Square Inc (SQ) that will allow it to do deliveries for small businesses. Due to this deal, Square users will be able to use the Postmates delivery couriers and in addition to that Postmates will also be integrated into the point of sale systems at different merchants. This is a significant deal since it opens up another large customer base for Postmates. Postmates charges a fee to Sellers on Square.
It’s All About Growth
Whether it’s becoming a behemoth in grocery-getting or focusing on becoming the biggest US-based cannabis delivery service, on-demand delivery technology could be presenting bigger opportunities for investors. Each new industry trend provides tremendous growth as company valuations continue to soar into the multi-billions. With the next wave of expansion expected to take place via new IPO’s and niche business models, this could be another right place/right time in tech.