Updated 4/4/2019 10am CST: +$25k additional investment since original story 1/30/19
Minneapolis tech startup Runerra has partnered with Caribou Coffee and closed on
$420k $450k in convertible debt to finance continued product development.
Cofounder and CEO Bharat Pulgam explains that Caribou is leveraging Runerra on a limited basis to experiment with free coffee delivery. As such, Caribou now offers customers using Runerra’s app free delivery from select stores/markets, while subsidizing the cost of a ‘runner’ service for those recipients. Business customers like Caribou can pay Runerra to market a deal, for the transaction delivery, or both.
As a result, end-users can benefit from free on-demand delivery without paying any more than they would to go get their fix in person.
In addition to the new Caribou relationship, Runerra has also renewed a pilou partnership with Target Corp. through 2019, which was initially announced last year during Techstars + Target demo day. Runerra also works with Qdoba – which has a popular presence in Dinkytown – where the University of Minnesota campus is predominantly situated.
Unlike the myriad of B2C delivery services available on the market today, Pulgam suggest one unique element of Runerra’s approach is the use of push notifications to users based on nearby scheduled deliveries. For example, users may receive an opt-in yet random notification that an order for delivery was made around them, prompting them to contemplate adding their own orders to the route in near real time.
“Our users don’t necessarily have to think about what they want in advance or even initiate their ordering process like traditional services require. Because we’re more supply-side focused, we can find and extract latent demand, and on average, when our notifications are sent, we are finding a 10% conversion on the impulse buy.”
The company reports over 1,000 local to Minneapolis users now on the platform and is, by design, only available for deliveries to customers on the University campus – where the four founders came from.
“We’re laser focused on finding our product market fit around the (U of M) campus right now before expanding into new territories,” Pulgam says. “It’s a typical two sided marketplace and the chicken vs. egg problem…and we’re prioritizing our ability to identify the businesses needs right now.”
Runerra has previously closed on about $160k and thus reached $580k in cumulative funding while growing the team up to eight people.