By LAURA LOREK
Founder of Silicon Hills News
Now he’s running a quickly growing startup and finishing up his degree as a senior studying mechanical engineering at the University of Texas.
Burpy, which expanded into the San Antonio market on Nov. 25th, plans to launch in Houston on Monday.
That means Burpy will provide grocery service to all major markets in Texas with plans to expand to Dallas-Fort Worth and Bryan-College Station early next year.
Burpy, which used to charge a delivery fee ranging from $15 to $20, no longer charges for delivery. Since it made that move, Burpy has taken off, Ali said.
“We’ve seen amazing adoption,” he said during a recent interview.
In San Antonio, in the last few weeks, Burpy has fulfilled more than 300 orders, Ali said.
“Burpy delivers everything that you can find in a pantry or a refrigerator,” Ali said. “A lot of organic food and a lot of produce.”
The company, based in Austin, has 45 daily shoppers in San Antonio, 50 in Austin, 30 in Houston and 20 in Dallas.
In the next year, Burpy expects to do about $1 million in revenue, Ali said. He graduates in May and plans to work on the business full time.
Burpy gets its grocery items from Wal-Mart, HEB, Costco, Whole Foods. And it recently added office supplies and Office Depot.
Beyond Texas, Burpy plans to expand to Oklahoma City, Tulsa and Kansas City.
Although grocery delivery has been tried before on a large scale and flopped, Ali thinks his business will succeed where others have failed largely because the company crowdsources delivery and uses the latest technology tools to manage its workforce and orders.
Burpy doesn’t have any inventory, warehouses or expensive delivery vans. It taps into existing resources to maximize its efficiency, Ali said. The company does have a few competitors such as Greenling, but it focuses primarily on locally produced organic food.
“We can deliver Oreos and hot Cheetos,” Ali said.
Other Austin competitors include Couch Potato, Munchy Mart and Austin Grocer, but they don’t deliver an extensive inventory of items, Ali said.
Other national competitors include Peapod, Instacart, Amazon Fresh and Walmart to go, but they are not available yet in the Texas market, Ali said. He hopes to establish first mover advantage with the customer base here.
Ali attended the latest Longhorn Startup Demo Day and he said his biggest takeaway came from Billionaire Mark Cuban. It’s best to learn from history, Ali said. Webvan, one of the biggest dot com failures of all time, blew through $1 billion setting up a home grocery delivery network and then filed for bankruptcy. Amazon bought its assets in bankruptcy. It also bought out HomeGrocer, which had gone public and then its stock plummeted.
Burpy has learned from the mistakes made by others, Ali said. The company has raised some angel investment. Sai Ganesh, CTO of Audingo in Austin, is mentoring Burpy. The company is also hiring drivers.
Disclosure: Burpy is an advertiser with Silicon Hills News