Last January, Austin delivery startup Favor made the tough call to pull its services from all cities outside of Texas to focus on profitability. It worked, turning the company's outlook around nearly six months ahead of schedule.
On Thursday, along with its $22 million Series B round, the company announced that it has become the first profitable on-demand delivery service in the country.
“Scaling a high-touch, hyper-local logistics business is no easy task, and all the credit goes to our team’s relentless focus executing on our strategic growth plan,” said CEO and president Jag Bath in a statement. “Achieving profitability at this scale, and the vote of confidence from our existing investors, is validation of what we are doing and underscores the future of the on-demand economy.”
Austin-based firm S3 Ventures led the round, with participation from Silverton Partners, Tim Draper and others.
Today’s new round brings Favor’s total funding to $34 million since its 2012 launch. The company has made more than 6 million deliveries.
The funding will be put toward product development and continued expansion throughout Texas and beyond. In addition, Favor plans to onboard more than 25,000 “runners” to help fulfill deliveries in its new zones.
“Favor has proven that they are building a healthy, scalable business, while maintaining their superior service and strong position in the on-demand delivery market,” said S3 Ventures managing director Brian R. Smith. “The company’s decision to avoid growth at all costs to instead focus on surgical, smart growth, has led them to beat their profitability goal by six months — a truly impressive achievement. We remain excited and confident in Favor’s future as they build upon this success.”
Image provided by Favor.
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