Food delivery, a hot area of food tech investment at the moment, isn’t all that new. Ideas like meal kits, ready to eat meals and fresh food have been around for a while. And back in 2011, a company called Good Eggs launched in San Francisco to bring farmer’s market quality food right to your doorstep. The idea was that Good Eggs would support local food systems and transform the concept of the farmer’s market, enabling consumers to place online orders for local foods, have them delivered quickly and support their local producers and farmers.

The company gained quick traction and secured back to back rounds of funding, launching in major markets across the country and raising close to $30 million in their Series A and B rounds in 2013 and 2014 respectively. But the company’s quick growth ultimately led to unmanageable logistics and supply issues and in 2015, it began the painful process of closing down major hubs, including Brooklyn, Los Angeles and New Orleans.

A company blog post by then-CEO Rob Spiro outlined the major miscalculations:

What we didn’t fully understand when we started was that we were creating a new category that required a different approach to supply chains, logistics, and commerce – all of the pieces of getting food from local producers to the kitchens of our customers. It was, and is, complicated, way more complicated than we ever anticipated.

Flash forward to 2016. Food delivery is now the biggest piece of the food tech investment pie and is estimated at close to $70 billion in size. Good Eggs, following the appointment of new CEO Bentley Hall, appears to be staging a comeback, announcing a $15 million investment and a revamped strategy to offer a wider range of products and outsource logistics services.

Our Take: We’ve seen food delivery startups come and go many times over in the last several years. It’s not an easy business to break into and it’s even harder to stay competitive once you’ve launched. Failure comes for all kinds of reasons – growth that comes too fast and too soon, inability to compete with the reach and resources of larger competitors, regulatory and legal issues – but investors don’t seem to be phased much by the challenges. The food business is being disrupted by these new systems of delivery and the use of technology to connect people with their food and it’s a big enough space, it seems, for everyone. For now.


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