Food and restaurant delivery tech is a hot industry. According to our estimates, some $3.2 billion in funding has poured into the restaurant delivery space — to put this in perspective, that’s just shy of the $3.79 billion that’s been earned by ALL restaurant IPOs in the last 10 years. Still, despite the investor interest, food delivery is a highly competitive industry, as evidenced by the sheer number of companies aiming to carve a niche in the market, some of which are already struggling.
Meal delivery companies Maple, SpoonRocket, and Sprig all ceased operations in 2017, despite having raised a combined $108 million. California-based meal-delivery startup Munchery has been struggling, too, laying off 30 workers at the beginning of 2017 and reportedly wasting food at an alarming rate. The cannibalization brought on by so many companies is apparent elsewhere outside the US, too. Despite support from marquee investors, India’s TinyOwl Technology (a mobile food ordering app) shut down in 2016, reportedly as a result of operational troubles. As of August 2017, at least 15 mergers and acquisitions had occurred among food delivery startups. In the coming months and years, we’ll likely see even new food delivery startups launch, while others will likely acquire (or be acquired) or fold entirely.
Below, a roundup of the biggest names in restaurant and food delivery technology services, from meal kits to e-grocers.
WHO’S WHO AMONG FOOD & RESTAURANT DELIVERY TECH COMPANIES
Food delivery is a vast category — one that, up until just a few years ago, probably conjured up images of Chinese takeout boxes and Pizza Hut orders placed over the phone. Today, just about everything can be delivered, and hundreds of companies are hoping to be the next “Uber of food.” The meal kit industry alone is said to be worth some $1.5 billion and food delivery as a whole is currently a $30 billion market. Interestingly, though, approximately $210 billion of restaurant food is eaten off-premise, making that $30 billion a small fraction of what delivery could be worth. Excluding pizza, that number shrinks even more, to just about $4 billion, or two percent of the total market.
Restaurant delivery has received the most funding of the bunch (at $3.2 billion), 27% higher than grocery delivery (the segment with the second-largest amount of funding). Catering received about 5% of the funding that restaurant delivery did.
Blue Apron delivers a recipe and its required ingredients (in exactly the right proportions) directly to customers’ doorsteps. The company made its initial public offering in June 2017, though it proved to be disappointing in the short-term, with one co-founder stepping down as shares sank in July. Amazon may have been at least partly to blame, crushing Blue Apron’s ambitious IPO when it announced it would make a $13.7 billion bid to acquire Whole Foods (and unveil meal kits in the process).
Chef’d bills itself as providing a service to those who enjoy cooking, but want to save time planning meals and grocery shopping. The meal kit has received $27.53 million in three rounds from one investor (Campbell Soup Company).
Gobble designs gourmet dinner kits (providing all the sourcing and presswork) with a slight twist. For one, ingredients are sourced locally from sustainable Bay Area farmers. Also, the company aims to provide “10-minute gourmet dinner kits with 3-step instructions,” thereby requiring minimal time and minimal cleanup.
Tovala offers a meal subscription service and companion oven. Think of it as a meal kit on steroids: ingredients come pre-cut, marinated, and packaged, so all users have to do is pop it in their ($399, Tovala-branded) oven. The Chicago-based startup’s smart, cloud-connected oven raised $1.6 million in seed funding in 2016.
Munchery offers same-day food delivery services (both meal kits and prepared meals) throughout the West Coast. As noted above, it’s struggled recently, though its CEO said in June that the company makes revenue from every box of food sold.
Plated home-delivers 30-minute gourmet recipes and ingredients, similar to Blue Apron. Since being founded in 2012, Plated has gobbled up $56.4 million in eight rounds of funding from 17 investors.
Like others in the meal kit segment, Home Chef offers fresh ingredients and recipe delivery service. In June, the company’s CEO said it was on track to generate more than $300 million in revenue in 2017 and had received several offers of buy-outs, though it isn’t necessarily entertaining them yet.
Green Chef promises “Fresh organic ingredients. Healthy, flavorful meals. Right at your doorstep.” In other words, a meal kit by any other name. The Colorado-based company is currently seeking to raise more funding (it’s raised $67 million thus far).
Spain’s answer to Blue Apron, the Madrid-based BuyFresco delivers fresh ingredients along with recipes on a weekly basis. Its most recent round of funding was in March 2015, when it raised $174,000 in venture capital.
Freshly delivers chef-prepared, ready-made meals that take approximately three minutes to heat up. In June 2017, Nestlé led a $77 million Series C to fund Freshly’s nationwide expansion (and bringing total funding to $107 million).
The Berlin-based Marley Spoon is a cooking platform that offers recipes, helps its customers order seasonal ingredients. The meal kit company has partnered with celebrities in the past, releasing a line of Martha Stewart-branded kits in 2016. Along with North America, the startup operates in the Netherlands, Austria, the U.K., and Australia.
Sun Basket is a healthy cooking service that delivers organic ingredients and customized recipes weekly to customers’ doors. Financial backers include the Tyler Florence Group and Unilever Ventures.
The Purple Carrot is a vegan, plant-based meal kit service. The company’s backed by a slew of VC firms as well as big names in food, like Mario Batali. In 2016, it secured $5 million in debt financing from WindSail Capital, a Boston-based investment firm focused on energy innovation and sustainability.
OrderUp is a food delivery marketplace focused on delivering from the restaurants outside of the top metros. They provide easy access to food from locals’ favorite restaurants using restaurant delivery software. Headquartered in Baltimore, Maryland, with an office in New York City, OrderUp has a dual-distribution model, with some locations owned and operated by the company, and others franchised. It was acquired by Groupon in 2015.
Postmates operates the largest on-demand delivery fleet in 40 major US metropolitan markets. In 2016, the company secured $141 million in what its founder called a “super, super difficult” fundraising effort. The round was led by Founders Fund, a San Francisco VC firm co-founded by billionaire Peter Thiel. Though Founders Fund was already a Postdates investor, it agreed to step up its support and add partner Brian Singerman to the board of directors last year.
UberEATSis an online meal ordering and delivery platform that allows users to order restaurant delivery via a website or smartphone/tablet application. The platform is owned by Uber and launched in 2015.
Waitr is an on-demand restaurant delivery and carryout platform based in Louisiana. So far, it’s received $10 million in funding from one investor (football player Drew Brees).
EAT Club is based in Palo Alto and delivers food from local restaurants via mobile or web. Over the past few years, the company has shifted its focus to corporate customers like Netflix, Tesla, DogVacay, Atlassian, and Samsung.
ChowNow is an online ordering, marketing, and customer management platform that allows restaurants to offer online ordering through their website, Facebook page, and app. The company’s received some $2 million in six funding rounds.
EatStreet is a burgeoning online and mobile food ordering service that streamlines commerce between restaurants and diners. Founded in 2010 in Madison, Wisconsin, the company has expanded to over 15,000 restaurants in over 150 markets nationwide. In February 2017, it acquired Philadelphia delivery startup Zoomer.
Caviar is a delivery solution for consumers to order food from local eateries with the ability to live-track the order on a map. Investors include Andreessen Horowitz and Winklevoss Capital.
DoorDash enables small businesses to provide its customers with local delivery services (the company started with restaurant delivery). It’s received at least $186.7 million in five rounds of funding from investors like Sequoia Capital and Y Combinator.
Berlin-based Delivery Hero is a network of online food ordering sites with over 100 restaurant partners worldwide. It’s made 13 acquisitions in its history, including foodpanda, Yemeksepeti (a Turkish company), and ClickDelivery.
Just Eat provides convenient and easy access to a huge variety of delivery restaurants and order food online. The British company has made 15 acquisitions and went public in 2014.
iFood is a mobile platform in Latin America wherein customers can find and order food from restaurants. The Brazilian company has received more than $98 million in funding.
Deliveroo is a technology company that focuses on marketing, selling, and delivering restaurant meals to the household or office. It acquired Maple in 2017.
GrubHub allows users to find and order food from restaurants in their vicinity that deliver or offer pickup, via an app and a website. It went public in April 2014 and, in August 2017, acquired Eat24 for some $287.5 million — roughly twice what Yelp paid to acquire it just two years ago, in a $134 million deal.
In addition to offering digitally based customer engagement services, tillster specializes in loyalty & self-service ordering for QSR, fast-casual & casual dining industries. It acquired Snap finger, a restaurant search and remote ordering site for take-out, delivery and catering, in 2013.
Clustertruck is a provider of food delivery services. The company operates a food truck to prepare food on the go and deliver it to the customers who order food using the company’s own mobile application. In 2016 it closed on a $1 million round of funding to fuel new locations.
Ando is a delivery-only restaurant based in New York and run by Momofuku’s David Chang. The company has received funding from a number of big-name investors, including actor Aziz Ansar and Jimmy Fallon.
JoyRun offers delivery from restaurants, taco trucks, and coffee shops, promising “no markups or exorbitant delivery fees.” It’s received nearly $10 million in funding from investors including TriplePoint Capital and Visionnaire Ventures.
Good Eggs is an online market that delivers groceries to customer’s homes seven days a week. In July 2016, the San Francisco-based company raised $15 million to expand across the US.
Instacart is a same-day grocery delivery company. The company has received some $674.8 million in seven funding rounds from 21 investors, and made at least one acquisition (it acquired Wedding Party, an app that collects wedding photos from guests and provides updates on the wedding details, in 2015).
Ship’t is a grocery delivery service that lets members order groceries and alcohol from their local store for delivery right to their door. Headquartered in Alabama, Shipt has raised $65.2M in three rounds from four investors.
Favor claims to be “the easiest way to get anything you want in your city delivered to your door in under an hour.” Headquartered in Austin, Texas, it allows users to place an order for nearly anything before being assigned a personal delivery assistant. Investors include Silverton Partners and S3 Ventures.
Door to Door Organics delivers boxes of food to consumers. They focus on organic, local, humanely raised, and fair-trade food that promotes good food eating. It acquired Relay Foods in 2016.
Drizly is the technology company “transforming the way alcohol is shopped, sold and shared online.” In other words, it’s an online liquor store. It’s brought in $34.98 million in six rounds from 27 investors.
Lazada Group operates Lazada, Southeast Asia’s number one online shopping and selling destination. The Singapore company acquired online supermarket RedMart in 2016.
Bigbasket.com is India’s largest online food and grocery store. It acquired Delyver — an e-commerce site that enables its users to order various products from local retailers — in 2015.
Indian company Godrej Nature’s Basket was founded in 2005 as a world food store and now operates 35 physical stores and an e-commerce grocery selling fresh vegetables, fruits, cold cuts, meats, cheese, organic foods, and dairy products. It acquired EkStop, an e-commerce, phone-commerce, and call-center retailer specializing in home deliveries, in 2015.
GrubMarket is an online farmers’ market supplying local fresh food and delivery services. In acquired San Francisco company FarmBox in January 2016.
Grofers specializes in on-demand, hyper-local deliveries (including groceries) from local merchants to consumers. It acquired both Townrush and Mygreenbox in 2015.
Farmhouse Delivery serves Austin and Houston with the highest-quality, sustainably-produced food from local Texas farmers. It acquired Greenling in 2016.
Walden Local Meat is a provider of meat and meat products intended to consist of grass-fed beef, pastured pork, lamb, and poultry from local farms. The company’s meat and meat products consist of clean, natural meats that utilize sustainable rotational grazing methods, enabling the users to purchase naturally locally produced meats.
ezCater is a Boston, MA-based web marketplace that helps people discover and order from local caterers everywhere in the U.S. Investors include Walnut Venture Associates and ICONIQ Capital.
Chewse, an online platform, allows office workers to browse through catering menus from local restaurants to create personalized menus. It’s so far received $14.6M in six rounds of funding.
Zesty provides regular office catering to companies in San Francisco and the Peninsula. The company touts more than 40 investors, including Great Oaks Venture Capital and Y Combinator.
Fooda is a food technology platform that offers office lunches to those at work. The Chicago-based startup has at least $21.7 million in funding, from Valor Equity Partners and Lightbank.
SpoonJoy offers “Personal Chefs on a Single Click.” The Bangalore company touts $1 million from two rounds of funding.
Smart Lunches is an online ordering and delivery service, that provides children with nutritious lunches. Investors backing the Boston-based company include Jonathan Kraft and Romulus Capital.
Goldbely discovers gourmet food gifts and ships them anywhere. Investors include Y Combinator and Draper Associates.
EatWith is a community that invites people to dine in homes, connect with hosts, share stories and enjoy homemade cuisine. (Sort of like an Airbnb, for dinner). TripAdvisor is an investor.
With Peach, local restaurants deliver lunch to your office via SMS text. Meals are always under $12 with delivery, tax, and tip included. The idea has resonated with investors, who’ve plunged nearly $11 million into the startup.
Foodist, a monthly subscription service, offers Foodist Box, a collection of gourmet products. The Hamburg company has $225,000 in funding.
FreshRealm is a vision for the future of food made possible by a temperature-controlled, reusable shipping vessel and a B2B2C cloud-based technology platform. The result is faster distribution, fewer preservatives, reduced food waste, and nation-wide eradication of fresh food deserts. The company underwent a $10 million round of funding in 2014.
THE FUTURE OF FOOD DELIVERY
Ordering food online isn’t exactly new (Seamless, for instance, has been around since 1999), but it still has quite a way to go. Currently, online food delivery touts just one-fifth the penetration of e-commerce, which does 10% of its sales online. The companies above (and those who’ve poured millions into their coffers) hope to change that. Morgan Stanley analysts believe that, ultimately, the entire $210 billion of food eaten off-premise food is up for grabs. So there’s more to come — but there isn’t room for everyone. In fact, some have predicted that as many as half of the meal kit companies currently on the market will die off following Amazon’s acquisition of Whole Foods. The question remains, who will take the biggest remaining chunk?
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ABOUT AARON ALLEN & ASSOCIATES:
Aaron Allen & Associates is a leading global restaurant industry consultancy specializing in growth strategy, marketing, branding, and commercial due diligence for emerging restaurant chains and prestigious private equity firms. We work alongside senior executives of some of the world’s most successful foodservice and hospitality companies to visualize, plan and implement innovative ideas for leapfrogging the competition. Collectively, our clients post more than $100 billion, span all 6 inhabited continents and 100+ countries, with locations totaling tens of thousands.