Companies that promise groceries delivered in 15 minutes surged during the pandemic—but are now in retreat.
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.”