It seems almost a lifetime ago when, in 2021, a gaggle of ultra-fast grocery store startups with interesting names like GoPuff and Gorillas raised gonzo amounts of cash.
We all know what happened since the go-go funding days of the quick grocery boom. While I wouldn’t call last year’s pullback a canary in the coal mine, it was one of the first segments in the broader food tech market to send a signal that the era of easy money ended.
And so last week, amid a simmering systemic financial crisis, we got the news that Food Rocket, a fast-grocery startup that launched service in San Francisco in 2021, has closed its doors.
Here’s the entirety of the statement sent out from the company:
Food Rocket, a rapid grocery delivery startup, ceased operations in March 2023 after exhausting its funding. In spite of overall profitability, Food Rocket ran out of capital while struggling to raise additional funding. The recent downturn in the capital market made it difficult to get a bridge from its investor retail company Alimentation Couche-Tard, and the founding team made the difficult decision to shut down its operations in the United States.
“We believe that the rapid delivery industry has disrupted the retail market and changed consumer behaviours. Unfortunately, current economic conditions reshuffled the tech market and presented significant challenges in the venture capital market. The decision to cease operations was incredibly hard, and we put in 100% up until the very last day, trying to stay afloat for our customers and team members.,” said Vitaly Alexandrov, CEO and founder of Food Rocket.
At this point, no one is probably surprised about the shutdown of one of the smaller players in this segment. Fast grocery’s well-publicized struggles amidst a downturn in funding and broader questioning of the segment’s business case were the writing on the wall for a company like Food Rocket. Combine that with the fact that the company closed during a week in which everyone’s attention was elsewhere, and the sound of the company’s doors closing barely made a whisper.
Ironically, Food Rocket’s shutdown comes just about the time when company founder Vitaly Alexandrov predicted fast grocery would be commonplace.
“In a year or two, it will be like a commodity,” Alexandrov told The Spoon in 2021. “Everyone will deliver in ten minutes.”
While his prediction didn’t quite come true – mainly because most things do not need to be delivered with that level of urgency and same-day delivery suffices for the bulk of our needs – I think larger players like Amazon and Walmart have made progress in building out their capabilities for fast delivery. Longer term, the rollout of new delivery and micro-manufacturing technologies will almost certainly speed up the pace at which consumers can satiate their needs nearly instantly.
Unfortunately for Food Rocket and many of its peers, they won’t be around to see the day when nearly-instant delivery becomes ubiquitous.
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