Bodega owners ask NYC for help as grocery delivery apps expand in Five Boroughs... UPDATE 7/17/22
- Thread starter bnew
- Start date
You definitely don’t go there to go grocery shopping, but you definitely go there when you only need one thing.
You also go there for a chopped cheese..
Market values of delivery apps like Gopuff, Gorillas plunge as losses pile up
Market values of delivery apps like Gopuff, Gorillas plunge as losses pile up
By
Josh Kosman and
Theo Wayt
March 3, 2022 8:51pm
Updated
The value of stakes in rapid delivery app Gopuff are languishing as investors fret over mounting losses in the fast-delivery business.NurPhoto
Investors are losing their appetite for grocery delivery apps.
Investors in Gopuff — a Philly-based delivery service that’s backed by Softbank — were eyeing a valuation of up to $40 billion in January as the company enlisted Goldman Sachs to help prepare for an IPO. But investors have lately been scrambling to unload their stakes at valuations as low as $15 billion — and have still been unable to find buyers, The Post has learned.
Gopuff and competitors like Gorillas, Getir and Jokr have burned through billions as they fight for dominance in the rapid delivery space. Despite the startups’ high growth, backers of the companies are getting hosed as investors sour on the industry overall, sources with direct knowledge told The Post.
One Gorillas investor who’s currently trying to sell a stake at a valuation of $2 billion isn’t getting bites — even though the company raised money at a $3 billion valuation as recently as December, a source said.
“Right now there is a lot of red,” a source who works on sales of private startups said. “The champions in each market are trading at a deep discount and everyone else is locking up.”
Investors in January were hoping that Gopuff could be valued at up to $40 billion in an IPO, but recently they’re having trouble selling shares at a $15 billion valuation, sources said.
Courtesy of @gopuff
In January, Gopuff hired Goldman Sachs and Morgan Stanley to work to prepare for a US IPO, Reuters reported. But the company’s bid to go public is now dead in the water, sources said.
“They can’t go public,” a source with direct knowledge said. “The IPO market has essentially died.”
Gopuff also issued a convertible note in December to raise $1.5 billion from existing investor Guggenheim Investments and other debt holders. The note will convert to equity at either the IPO price or at a maximum valuation of $40 billion, Reuters reported, citing sources.
A Gopuff spokesperson did not comment on the potential IPO, but said that “the trajectory of our business in the US and Europe speaks for itself.”
“We are proud to have the continued support from some of the most dynamic and respected investors,” the spokesperson added.
“We do not comment on financial information but these rumors are unrelated to us.”
A Goldman spokesperson declined to comment. One source close to the IPO banks said Gopuff expected to go public this year and now it is waiting to see how the market will shake out.
Gorillas and Jokr did not respond to requests or comment for this story.
Delivering groceries on demand requires massive spending on “dark store” rentals and full-time employees in pricey markets like Manhattan. On top of that, many apps have offered deep discounts or free groceries to lure new customers.
While investors may have been willing to subsidize the companies during the pandemic-era tech boom, insiders say that times have changed.
“Investors are getting very weary of these high-cash burn instant delivery companies,” said Next Round Capital CEO Ken Smythe, who advises institutional investors buying and selling stakes in private startups.
In December, Gorillas upped delivery times from just 10 minutes to as much as an hour in an apparent bid to save on labor costs
TOBIAS SCHWARZ
Would-be investors in the apps have been scared off by the poor market performance of Doordash and the intense capital needs of the fiercely competitive delivery market, Smythe said.
Doordash went public in 2020 and saw its shares soar to an all-time high $257 in November. But its stock has since plummeted to less than $104 as of Thursday amid a broader tech rout and weak appetite for companies with high customer acquisition costs.
“They are saying, ‘Just look at DoorDash’s stock,’” Smythe said of potential investors. “If Gopuff needs to raise additional capital, it may not be pretty”
Faced with an increasingly hostile market, delivery apps have taken steps to cut costs in recent months.
Gorillas recently upped delivery times from just 10 minutes to as much as an hour in an apparent bid to save on labor costs, as first reported by The Post in February.
Meanwhile, Gopuff slashed about 100 jobs and paused plans to open new locations, Insider reported in January. The Information reported the same month that Jokr is exploring a sale to a competitor — a claim the company has denied.
The companies are also facing pressure from New York City politicians including council members Gale Brewer and Christopher Marte, who have both accused the apps of flouting zoning laws by operating warehouses in retail-zoned spaces.
In addition, Marte is planning to introduce a bill that would bar grocery apps from promising excessively quick delivery times because they incentivize delivery workers to break traffic laws, as first reported by The Post.
Market values of delivery apps like Gopuff, Gorillas plunge as losses pile up
By
Josh Kosman and
Theo Wayt
March 3, 2022 8:51pm
Updated
The value of stakes in rapid delivery app Gopuff are languishing as investors fret over mounting losses in the fast-delivery business.NurPhoto
Investors are losing their appetite for grocery delivery apps.
Investors in Gopuff — a Philly-based delivery service that’s backed by Softbank — were eyeing a valuation of up to $40 billion in January as the company enlisted Goldman Sachs to help prepare for an IPO. But investors have lately been scrambling to unload their stakes at valuations as low as $15 billion — and have still been unable to find buyers, The Post has learned.
Gopuff and competitors like Gorillas, Getir and Jokr have burned through billions as they fight for dominance in the rapid delivery space. Despite the startups’ high growth, backers of the companies are getting hosed as investors sour on the industry overall, sources with direct knowledge told The Post.
One Gorillas investor who’s currently trying to sell a stake at a valuation of $2 billion isn’t getting bites — even though the company raised money at a $3 billion valuation as recently as December, a source said.
“Right now there is a lot of red,” a source who works on sales of private startups said. “The champions in each market are trading at a deep discount and everyone else is locking up.”
Investors in January were hoping that Gopuff could be valued at up to $40 billion in an IPO, but recently they’re having trouble selling shares at a $15 billion valuation, sources said.
Courtesy of @gopuff
In January, Gopuff hired Goldman Sachs and Morgan Stanley to work to prepare for a US IPO, Reuters reported. But the company’s bid to go public is now dead in the water, sources said.
“They can’t go public,” a source with direct knowledge said. “The IPO market has essentially died.”
Gopuff also issued a convertible note in December to raise $1.5 billion from existing investor Guggenheim Investments and other debt holders. The note will convert to equity at either the IPO price or at a maximum valuation of $40 billion, Reuters reported, citing sources.
A Gopuff spokesperson did not comment on the potential IPO, but said that “the trajectory of our business in the US and Europe speaks for itself.”
“We are proud to have the continued support from some of the most dynamic and respected investors,” the spokesperson added.
“We do not comment on financial information but these rumors are unrelated to us.”
A Goldman spokesperson declined to comment. One source close to the IPO banks said Gopuff expected to go public this year and now it is waiting to see how the market will shake out.
Gorillas and Jokr did not respond to requests or comment for this story.
Delivering groceries on demand requires massive spending on “dark store” rentals and full-time employees in pricey markets like Manhattan. On top of that, many apps have offered deep discounts or free groceries to lure new customers.
While investors may have been willing to subsidize the companies during the pandemic-era tech boom, insiders say that times have changed.
“Investors are getting very weary of these high-cash burn instant delivery companies,” said Next Round Capital CEO Ken Smythe, who advises institutional investors buying and selling stakes in private startups.
In December, Gorillas upped delivery times from just 10 minutes to as much as an hour in an apparent bid to save on labor costs
TOBIAS SCHWARZ
Would-be investors in the apps have been scared off by the poor market performance of Doordash and the intense capital needs of the fiercely competitive delivery market, Smythe said.
Doordash went public in 2020 and saw its shares soar to an all-time high $257 in November. But its stock has since plummeted to less than $104 as of Thursday amid a broader tech rout and weak appetite for companies with high customer acquisition costs.
“They are saying, ‘Just look at DoorDash’s stock,’” Smythe said of potential investors. “If Gopuff needs to raise additional capital, it may not be pretty”
Faced with an increasingly hostile market, delivery apps have taken steps to cut costs in recent months.
Gorillas recently upped delivery times from just 10 minutes to as much as an hour in an apparent bid to save on labor costs, as first reported by The Post in February.
Meanwhile, Gopuff slashed about 100 jobs and paused plans to open new locations, Insider reported in January. The Information reported the same month that Jokr is exploring a sale to a competitor — a claim the company has denied.
The companies are also facing pressure from New York City politicians including council members Gale Brewer and Christopher Marte, who have both accused the apps of flouting zoning laws by operating warehouses in retail-zoned spaces.
In addition, Marte is planning to introduce a bill that would bar grocery apps from promising excessively quick delivery times because they incentivize delivery workers to break traffic laws, as first reported by The Post.
Mandarin Duck
Majestic and Highfalutin
Thanks for the input.
As a NY'er what's your stance on this?.
yeah but I don't know how much they average with tips.
I’m actually from Jersey but I worked in the city until recently.
also used to fukk a girl in brooklyn until recently.
i never use those delivery apps but the deli’s are clutch. I think there room for both.
Mr. McDowell
The Brotha's Got His Own Money
I grew up in Eastern Queens. We had tons of supermarkets, but when you go closer to Manhattan, where it becomes more walkable, for some reason there were less supermarkets. Never understood it, but I'm sure it has something to do with the rent.
I live in LA now and I have 3 Ralphs, 3 Trader Joes, Smart and Final, Pavilion's and a Whole Foods, all within a mile of my house, depending on the direction you drive.
No one gaf about a Walmart in nyc - y’all can keep that white trash haven for hoarders and mutant human habitats.
“With this new store, Target now officially has 91 total stores in the greater New York City area” including the other options in stores available
Walmart isn't the issue, it was just an example. The issue is the lack accessible, affordable supermarket options in New York. In the last decade a large number of supermarkets (Pathmark, A&P, Walbaums) have all closed leaving a void.
I'm in Brooklyn and the three target locations closest to me, Costco, Trader Joe's on Atlantic that I would go to aren't really that accessible or convenient even though I have a car and wfh.
Forgot to answer this apologies. Everyone's safety but especially delivery people. Since the pandemic, we've had increased vehicular traffic on the roads. Our roads aren't even built for all the vehicle traffic and even less equipped for the increased bike traffic.
It's why the had to rush a bunch of laws through in the last year.
NYC Council Approves Sweeping New Working Standards For Food Delivery Drivers In First-Of-Its-Kind Move
most of those laws don't really effect the delivery personnel for these 15min or les delivery businesses. they workers have access to bathrooms at the dark store and are employees not contract workers so theres no chance of them earning less than minimum wage. the tip transparency law is very beneficial to them tho.
delivery workers on scooters and bikes doesn't negatively impact motor vehicle traffic.
Instant Grocery Delivery App Buyk Files for Bankruptcy After Russian Sanctions
Instant Grocery Delivery App Buyk Files for Bankruptcy After Russian Sanctions
A Buyk delivery person in New York City.Photographer: Noam Galai/Getty Images
By
Jeremy Hill and
Jackie Davalos
March 17, 2022, 3:37 PM EDTUpdated onMarch 17, 2022, 5:09 PM EDT
Follow the authors
@jackiedavalos1
Rapid grocery-delivery app Buyk Corp. filed for bankruptcy and will permanently shut down after fallout from Russia’s invasion of Ukraine restricted the startup’s access to funding.
Buyk, which launched in New York just last year, listed assets and liabilities of as much as $10 million each in its bankruptcy petition, filed Thursday. The company has ceased operations and plans to sell off remaining its remaining inventory, according to a statement.
Buyk struggled to access financing after President Vladimir Putin restricted the flow of money outside of the country, Chief Executive Officer James Walker said earlier this month. The startup has been exploring selling itself in a bid to secure capital.
“We have diligently explored all possible options and partnerships to restructure Buyk and keep the business going, however, the war in Ukraine and subsequent restrictions in funding have unfortunately made it impossible to continue operations,” Walker said in a statement Thursday.
The company listed its co-founders, Slava Bocharov and Rodion Shishkov, as its largest equity holders. Buyk sought court protection “in view of the inability of the investors to further fund the ongoing business,” according to the court papers.
Buyk’s founders also started the delivery service Samokat, one of Russia’s biggest instant grocery-delivery companies. It’s partially owned by state-controlled bank Sberbank, which landed last month on the list of sanctioned entities by the U.S. government over Russia’s invasion of Ukraine.
Buyk has arranged a loan of $6.5 million to help cover costs while in bankruptcy, court papers show. The first $5 million is earmarked for the payment of employees and couriers, according to the documents.
The firm recently furloughed almost all its employees -- about 900 people -- amid financial concerns. The startup’s founders are Russian and had been providing bridge financing while the company prepared to close its next funding round. Buyk had been exploring selling itself and had “reached out to all kinds of potential strategic partners in the U.S.,” including DoorDash Inc., Gorillas and Gopuff, Walker said.
Buyk is among a spate of startups offering consumers grocery delivery within 15 minutes. It has received $46 million in venture funding, including from CM Ventures, Fort Ross Ventures and Citius, according to PitchBook. The majority of its 38 warehouses, or dark stores, were in New York, but the startup also expanded to Chicago this year.
Rapid delivery rival Fridge No More permanently shut down its operations last week after talks with DoorDash to buy some of its business fell through.
Instant Grocery Delivery App Buyk Files for Bankruptcy After Russian Sanctions
- Company struggled to access money after Putin’s restrictions
- Grocery firm furloughed around 900 workers amid cash crunch
A Buyk delivery person in New York City.Photographer: Noam Galai/Getty Images
By
Jeremy Hill and
Jackie Davalos
March 17, 2022, 3:37 PM EDTUpdated onMarch 17, 2022, 5:09 PM EDT
Follow the authors
@jackiedavalos1
Rapid grocery-delivery app Buyk Corp. filed for bankruptcy and will permanently shut down after fallout from Russia’s invasion of Ukraine restricted the startup’s access to funding.
Buyk, which launched in New York just last year, listed assets and liabilities of as much as $10 million each in its bankruptcy petition, filed Thursday. The company has ceased operations and plans to sell off remaining its remaining inventory, according to a statement.
Buyk struggled to access financing after President Vladimir Putin restricted the flow of money outside of the country, Chief Executive Officer James Walker said earlier this month. The startup has been exploring selling itself in a bid to secure capital.
“We have diligently explored all possible options and partnerships to restructure Buyk and keep the business going, however, the war in Ukraine and subsequent restrictions in funding have unfortunately made it impossible to continue operations,” Walker said in a statement Thursday.
The company listed its co-founders, Slava Bocharov and Rodion Shishkov, as its largest equity holders. Buyk sought court protection “in view of the inability of the investors to further fund the ongoing business,” according to the court papers.
Buyk’s founders also started the delivery service Samokat, one of Russia’s biggest instant grocery-delivery companies. It’s partially owned by state-controlled bank Sberbank, which landed last month on the list of sanctioned entities by the U.S. government over Russia’s invasion of Ukraine.
Buyk has arranged a loan of $6.5 million to help cover costs while in bankruptcy, court papers show. The first $5 million is earmarked for the payment of employees and couriers, according to the documents.
The firm recently furloughed almost all its employees -- about 900 people -- amid financial concerns. The startup’s founders are Russian and had been providing bridge financing while the company prepared to close its next funding round. Buyk had been exploring selling itself and had “reached out to all kinds of potential strategic partners in the U.S.,” including DoorDash Inc., Gorillas and Gopuff, Walker said.
Buyk is among a spate of startups offering consumers grocery delivery within 15 minutes. It has received $46 million in venture funding, including from CM Ventures, Fort Ross Ventures and Citius, according to PitchBook. The majority of its 38 warehouses, or dark stores, were in New York, but the startup also expanded to Chicago this year.
Rapid delivery rival Fridge No More permanently shut down its operations last week after talks with DoorDash to buy some of its business fell through.
Fast-delivery apps face NYC crackdown over ‘dark stores,’ worker safety
A trio of bills set to be proposed in the New York City Council is eyeing a crackdown on rapid grocery delivery apps by regulating their storefronts and adding safety measures for workers, The Post…
nypost.com
Fast-delivery apps face NYC crackdown over ‘dark stores,’ worker safety
ByLisa Fickenscher and
Theo Wayt
July 13, 2022 12:38pm
Updated
Rapid delivery apps like Getir face a crackdown under new New York City Council bills.William Farrington
A trio of bills set to be proposed in the New York City Council would crack down on rapid grocery delivery apps such as Gopuff, Getir and Gorillas by regulating their storefronts and adding safety measures for workers, The Post has learned.
The first bill, from Upper East Side City Council Member Julie Menin, would require the apps’ storefronts — often known as “dark stores” — to be licensed and regulated by the Department of Consumer and Worker Protection. The agency, which Menin herself previously led, would have the authority to revoke licenses for misleading advertising or deceptive trade practices, among other violations.
Two other bills, from downtown Manhattan Council Member Christopher Marte, would limit the weight of the backpacks worn by delivery workers and take aim at promises to delivery goods within specific timeframes.
One of Marte’s bills would require business that promise to deliver within 15 minutes to include disclaimers stating that “delivery is not guaranteed within 15 minutes… for the safety of the public and delivery workers.” The bill would also ban companies from retaliating against workers who fail to make speedy deliveries.
“These stores are operating in the city in a completely unregulated fashion,” New York City Council member Julie Menin told The Post.Robert Miller for NY PostCritics including Marte say that fast delivery apps incentivize employees to break traffic laws, driving electric bikes on sidewalks and endangering pedestrians.
“These stores are operating in the city in a completely unregulated fashion,” Menin told the Post. “The advantage of licensing [gives the city] the power to suspend or revoke the license so they are not operating in this lawless atmosphere.”
The Post first reported on Marte’s plans to regulate delivery times in February. In the following months, several apps including Gorillas dropped references to specific delivery times from their marketing materials — a move that industry watchers said was likely an effort to save on labor costs.
Gopuff laid off 10% of its employees this week.William C. Lopez/NY PostRegarding backpacks, Marte’s bill would fine companies $2,500 for denying a delivery employee future work opportunities for refusing to deliver goods weighing more than 22 pounds in a single trip.
Menin and Marte plan to tout the bills at a City Hall press conference on Thursday morning alongside activists from the Los Deliveristas Unidos — a coalition of New York City delivery workers — as well as members of the Bodega and Small Business Group and the Asian American Federation.
However, the current economic downturn may bring the fast delivery industry to heel before the City Council has a chance to pass any legislation.
A Gorillas mini-warehouse in Brooklyn.AP
Fast delivery grocery workers would get new protections under the proposed legislation.REUTERS
Investors are pulling out of the industry amid soaring interest rates and a stock market slump, hanging many delivery companies out to dry after they expanded rapidly during the pandemic.
One of the largest fast delivery companies, Jokr, closed its Big Apple and Boston operations in June. Two other fast delivery apps, Buyk and Fridge No More, both shut down in March, as first reported by The Post.
And Gopuff, the largest of the fast delivery apps, announced it was laying off 10% of its staff on Tuesday. The company had already laid off about 3% of its workforce earlier this year.
Getir, meanwhile, axed 14% of its global workforce in May.
Getir spokesman Nico Probst said the company “welcomes regulations around the protection of delivery riders and microfulfillment centers,” and said the company will continue to work with government officials to comply with local laws.
“Getir is also an industry leader in protecting delivery riders by employing them as W-2 workers and providing them with health benefits,” Probst added.
“We provide best in class safety training and high-quality safety gear.”
Ethnic Vagina Finder
The Great Paper Chaser
Reading this thread for the first time, my first thought was these apps/services weren’t going to last. They are a bubble. Bodegas are safe.
This I get to the last page
You can make an app for damn near anything. But do people really want it?
People are use to or don’t take out so using doordash or Uber eats is a natural progression. But this is just dumb. Amazon can get away with it because they bought whole foods.
This I get to the last page
You can make an app for damn near anything. But do people really want it?
People are use to or don’t take out so using doordash or Uber eats is a natural progression. But this is just dumb. Amazon can get away with it because they bought whole foods.
The Speedy Downfall of Rapid Delivery Startups
Companies that promise groceries delivered in 15 minutes surged during the pandemic—but are now in retreat.
The Speedy Downfall of Rapid Delivery Startups
Companies that promise groceries delivered in 15 minutes surged during the pandemic—but are now in retreat.
PHOTOGRAPH: ROBERT K. CHIN/ALAMY
IT TOOK ONLY eight months for Jokr, the superfast delivery startup, to become a unicorn, and just six months more for its strategy to start coming apart. Jokr had plastered New York City with splashy ads promising to deliver groceries within 15 minutes—For free! With no minimum order!—and raised a total of $430 million in venture capital to continue blitzscaling across cities around the world. From Boston to Bogotá, its turquoise-clad couriers whizzed around on scooters, carrying pints of ice cream and jars of pasta sauce.
Jokr was also bleeding money. In the first half of 2021, the startup took in $1.7 million in revenue but suffered $13.6 million in losses, according to data reviewed by The Information. In April it shut down in Europe. This June—14 months after launch and a year after touting plans to build 100 microwarehouses in New York City alone—Jokr announced that it was pulling out of the United States, and laid off 50 employees. The company still operates in cities like São Paolo, Mexico City, and Bogotá.
Other fast-delivery startups have also become fast-shrinking. In May, Gorillas and Getir—two of the largest companies in the sector—laid off thousands of employees and retreated from prime delivery cities around Europe. Gopuff, valued at $15 billion in 2021, vaporized 76 of its 500 distribution centers this summer. Those are the lucky ones. Others, like Buyk, Fridge No More, and Zero Grocery, have already gone bust, disappearing just as rapidly as they arrived.
The downfall of superfast delivery reflects the sobering mood of 2022. In the last two years venture capitalists sunk nearly $8 billion into the six rapid delivery startups competing in New York City, encouraging fast growth and a land grab. Now, investors are increasingly demanding profitability. The sudden reversal strikes Thomas Eisenmann, a professor at Harvard Business School, as reminiscent of the 2000 dotcom crash, when buzzy startups like Kozmo—which promised one-hour delivery of groceries and DVDs—folded just a few years after collecting millions from VCs. “With these new businesses, what’s changed?,” he says. “It didn’t work then and it’s not working now.”
Eisenmann teaches a class on startup mistakes, and last year wrote a treatise on the topic titled Why Startups Fail. He says that rapid delivery companies are vulnerable to a common pattern of failure, where early gains and growth aren’t sustainable. The first wave of customer interest comes easy and free, because people are willing to try out a new service with an incredible promise. But in order to keep those customers and earn new ones, a startup has to clarify its value proposition. For rapid delivery, that means finding people who regularly need things like BandAids or a banana delivered urgently—and are willing to pay a premium for it—rather than walking to the bodega to get it themselves.
When new customer growth starts to dwindle, Eisenmann says, “you start having to offer $20 of free groceries on every order to get new customers.” From there, the economics can rapidly deteriorate. A newly cloudy economic outlook and recent high inflation make it a bad time to try and persuade people to adopt a new premium service.
Margins are already razor-thin for services that deliver groceries in hours or longer. On a $100 online grocery basket, about $70 goes toward the wholesale cost of the goods a customer ordered. The other $30 gets devoured by overhead costs like refrigeration and storage, the wages of in-store workers who pick items from the shelves and pack them into bags, and the cost of delivery. A recent report from McKinsey found that while the typical North American grocer makes 4 percent profit margin from in-store shoppers, they lose 13 percent on each online order. Companies like Instacart, which piggyback on the infrastructure and stock of existing stores by partnering with grocery businesses, have fared better, though Instacart is still not profitable.
Demand for online groceries has surged in the last two years, largely because of the pandemic inspiring more people to try and avoid in-store shopping. In 2020 online grocery orders increased 50 percent; demand for instant delivery increased 41 percent, McKinsey found. “The consumer need is there,” says Vishwa Chandra, a partner at McKinsey who coauthored the report. “The question is, how do you manage the economics?”
Rapid delivery startups might be able to improve their businesses by keeping items in “dark stores,” microwarehouses designed to make it faster for a worker to pick out and pack a basket of goods than is possible in a conventional retail store designed for browsing. They can also pass on more costs to customers, selling a $4 loaf of bread for $6, for example. But building enough dark stores to serve all parts of a city within 15 minutes still requires massive investment. Managing inventory across them all to ensure the correct items are always on hand is also tricky. “It’s more cost-efficient, but you need enough demand to make a return on investment,” says Chandra.
Rapid delivery startups also tend to spend more on delivery costs for each order than more conventional companies. When you can get what you want in minutes, people can feel empowered to make impulse purchases, like a late night candy bar. But a delivery driver or a bicycle courier costs the same amount, whether ferrying a $75 bag of groceries or a $5 pint of ice cream. Batching orders together, so a courier makes multiple drop-offs on a single trip, can save costs but is difficult to pull off when orders must arrive within 15 minutes. The result? Many fast-delivery services “lose money on every transaction,” says Eisenmann.
Many rapid delivery companies have made their punishing economics still worse by offering generous promotions to try to lure new customers. New York-based startup 1520 offered 15-minute delivery with no minimum order or delivery fee in 2021. Cofounder Maria Daniltceva described the company’s business model as “super-efficient,” and suggested that 1520 could even improve on grocery stores’ margins because it didn’t have to invest in retail space. By the end of 2021, 1520 exhausted its funding and shut down.
Those kinds of generous promotions aren’t likely to continue. For superfast delivery startups to last until 2023, they’ll have to prove that they can make their economics work—and quickly. Instacart, which has become a leader in same-day grocery delivery, is now working on its own service to bring customers their orders within 15 minutes. The winners in the category will be whichever startups can deliver on their promises the fastest, without defying economic reality.
SadimirPutin
Superstar
The gig economy is not working