Lula business model

Lula is a subscription delivery service that was founded by Adit Gupta and Tom Falzani. The company, which recently raised $5.5 million in seed funding, allows convenience store owners to list their inventory for local delivery. 

The idea for Lula came after Gupta’s family-owned convenience store in New Jersey closed because of the pandemic. Gupta and Falzani tried unsuccessfully to get the store featured on delivery apps for a few weeks, but could not make it work. The pair then realized there was a need in the market for an instant, scalable delivery service that did not require the micro-fulfillment centers that many such apps utilize.

In the following sections, we will delve into the business model of this exciting new startup which is currently run by a small team of just eight full-time and seven part-time employees.

Evolution of the Lula business model

The initial business model involved hiring local, eco-conscious drivers who owned carbon-neutral forms of transportation such as electric cars, scooters, and bikes. This model was also focused on collecting a subscription fee from the customer.

The model then evolved with an app listing the inventory of local stores and orders fulfilled by third-party services such as Uber Eats, Postmates, and DoorDash. Lula also sends each store sustainable packaging and a tablet to receive orders. 

Note that Lula’s business model does not incorporate commissions. Instead, local stores pay Lula a subscription fee of between $50 and $99 per location per month with each compensated for purchases made within the app. Aside from delivery, the app also takes care of account management, marketing, and customer service.

In essence, Lula is targeting smaller businesses such as convenience stores, gas stations, pharmacies, pet stores, liquor outlets, and even cannabis stores that were traditionally underserved by third-party delivery platforms. In an interview with TechCrunch in February 2022, Gupta believed there were 150,000 such stores in the United States alone.

Future aspirations

Lula is currently available in 31 states with plans to expand into all 50 states and acquire 2,000 new customers in 2022. The company is also in talks with convenience store chains in locations such as Europe and Mexico.

The seed round of funding will allow the company to make senior-level hires in the Philadelphia area where Lula began. Gupta and Falzani will also use the capital to hire Drexel University students, with both co-founders former Drexel students themselves.

Key takeaways:

  • Lula is a subscription delivery service that was founded by Adit Gupta and Tom Falzani. The company allows convenience store owners to list their inventory for local delivery by a third-party courier.
  • Lula operates under a subscription-based business model where it sells access to a business solution for small convenience stores. Third-party couriers take care of delivery, while Lula offers account management, marketing, and customer service.
  • Lula intends to serve the more than 150,000 convenience stores across the United States, a market traditionally overlooked by delivery platforms such as DoorDash, Uber Eats, and Postmates.

Case Studies: DoorDash, Uber Eats, Postmates.

Read Next: Business Models.

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