Investor Bill Gurley has been one of the loudest voices saying that a lot of Silicon Valley startups are overvalued, and one of the companies he named last month was delivery company Postmates.
Postmates CEO Bastian Lehmann defended himself against Gurley’s criticism on the Bloomberg West TV program today, saying that a lot of companies might be overvalued but that Postmates isn’t one of them.
He noted that Postmates is valued a lot lower than Uber, but said its business model looks a lot like Uber.
Here’s what he means. When you order a car from Uber, you pay Uber and the company splits the revenue with the driver. Uber may lose money overall when you add in marketing and driver recruitment expenses, but at least it’s making money on each ride.
The knock against some on-demand companies like Postmates is that they’re actually losing money on each delivery. But Lehmann insists that’s not the case because Postmates is also earning some money from the merchants who it delivers for, not just from the customer.
“We have had a positive gross margin almost since we launched Postmates, for almost three and a half years now,” Lehmann claimed. He said that Postmates will be profitable in 2016 if it continues growing as it has, and he later noted that the gross margin on each delivery is about 20%.
He also contrasted Postmates, which delivers goods from local merchants, with Amazon, which stocks all the goods itself.
Postmates is really an anti-Amazon. We’re trying to be there for the local merchants…We don’t want to build warehouses to ship things from, we like to take the city and use it as a warehouse.
Watch the full video here:
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.