On-demand meal delivery service SpoonRocket announced today that it is shutting down, effective immediately. The Berkeley-based company, reports TechCrunch, was unable to secure additional funding and when a last-ditch effort at negotiating an acquisition fell through, the company was essentially out of cash and forced to close. SpoonRocket, which specialized in delivering meals for less than $10 quickly, existed in a space crowded with similar companies such as Sprig, Caviar, and Munchery.
Co-founder Steven Hsiao announced the closure in a blog post this morning, noting that SpoonRocket ultimately was unable to compete with its better-funded rivals.
Our devotion to excellence has even netted us over 1800 Yelp reviews in less than 3 years at over a 4 star rating. However, we continued to face intense competition from competitors like Sprig and an ever tightening funding environment. We explored all strategic options till the very last minute but unfortunately, they all fell through. It has been a great run and a joy to hear the positive feedback we get from our customers about how much they love our service everyday.Interestingly, this announcement came the same day that UberEats launched a standalone app for food delivery, delivering meals from 100 lcoal restaurants and food businesses in about a half hour. Eater reports that the new app expands upon the services offered by the six-month-old delivery program, and will now deliver from 100 restaurants in SF, covering all neighborhoods now. "[We] thought a new app was the right thing to do for meeting eaters’ needs and restaurants’ needs to highlight their food and menus,” UberEats general manager Susan Alban told the publication.
All along, tech pundits have noted that Uber was likely enter into the food-delivery space given how many drivers they have on the road already some of whom can pick up an extra delivery or two between fares now, when things get slow.
While SpoonRocket's sudden closure will likely come as a shock to its many employees and drivers, it seemed clear way back in 2014 that there likely wasn't enough market space for all the companies clamoring to bring you dinner. "Sorry to say it, Instacart, SpoonRocket, and the rest," as SFist put it at the time. "The recent past has taught us you're not all going to make it. So don't blow your wad on any Super Bowl ads before you decide to 'pivot' with all that VC funding."
Indeed, we learned yesterday that Instacart was drastically slashing driver pay in an effort to stay profitable.
In the meantime, UberEats is offering free delivery for a one- or two-week promotional period, after which a $5 delivery fee will get added because, yes, the drivers do need to get paid.
This post has been updated to reflect a correction made to the TechCrunch story. Sprig was not looking into being acquired, rather it was considering acquiring SpoonRocket.