Twin Cities startup setting up 'milkman' system of regular neighborhood delivery routes

Bharat Pulgam, who is trying to build his company in the competitive food-delivery market, has raised $1.8 million from well-known venture capitalists.

His four-year-old company, Pikup, has added customers and retail partners but has yet to become profitable.

"We're still trying to figure that out," Pulgam said. "Revenue is minimal."

Pikup started as a service to deliver on college campuses. When campuses shut down during the pandemic, it switched to a variation of the "milkman" model of stacking as many deliveries as possible to the same neighborhood on the same days of the week.

"We give customers a dependable schedule, kind of like the milkman," Pulgam said. "By doing that, the accuracy, quality of service and efficiency of delivery improves.''

By having customers schedule in advance, Pikup, in theory, is better at filling the vehicle and using the driver's time. It also is the marketer for client companies by pitching discounted specials to repeat customers in the same neighborhoods.

Instead of a delivery charge, the merchant then shares part of the sale with Pikup, Pulgam said.

Pikup offers weekly deliveries across the Twin Cities from merchants such as Lunds & Byerlys, Cub Foods, Target, Costco and Trader Joe's.

Pikup raised the equity capital from early employees of Nextdoor and Instacart, as well as venture funders Matchstick, Unusual and Starting Line.

"Pikup represents the logical next evolution in on-demand commerce," said Scott Holloway of Starting Line. "By aggregating demand in pre-scheduled drop windows, costs come way down and efficiencies go way up."

Pulgam, 22, and his partners dropped out of college in 2018 when Pikup, formerly called Runerra, became part of the Target+Techstars accelerator.

Pikup employs six in Minneapolis and a software-engineering staff of 15 in India.

"The current delivery model is broken, customers pay more than they need to, drivers are denied basic workplace protections and merchants don't make any money on delivery," said co-founder Sam Lerdahl. "With delivery companies posting record losses, the delivery space is ripe for disruption.''