Inside Gopuff’s Ambitious and Costly Bid to Dominate European Instant Delivery

Executives at Gopuff, a U.S. instant-delivery company that has planned to go public this year, recently told investors that its foray into Europe, which began last year, has topped expectations: The business is on pace to generate $100 million in annual revenue there, or about 5% of its overall revenue currently, and is growing three times faster than it had projected, according to two people with direct knowledge of the discussions.

But Gopuff has a mountain to climb: In London, one of its earliest overseas cities, average order volumes remain well below what it needs to break even there, according to one current and one former senior employee. That may not be surprising, given its relatively recent launch in the city amid intense competition from local incumbents.

The region’s high labor costs are also posing challenges: The company recently discussed paying delivery workers in Europe and the U.K. based on delivery trips they make or hours when they are actively delivering goods—like it does in the U.S.—instead of what it currently does: pay them for regular shifts, even when they aren’t actively delivering. The idea ruffled feathers internally and was ultimately put on ice because it could upset workers as well as regulators, according to the current and former employees.