Peach, the Seattle-based corporate lunch delivery service, has laid off 33 percent of its staff, according to Geekwire, which broke the story.
Peach CEO Nishant Singh told Geekwire the layoffs were a result of a “sales experiment” wherein the company ratcheted up its sales efforts. Evidently that didn’t pan out and Peach let go of roughly a dozen employees.
The Peach news comes at a time of adjustment in the corporate catering sector. Last week EAT Club acquired Farm Hill, and last month Square bought Zesty for its Caviar catering service.
I use the term adjustment instead of retraction as there is still money going into corporate meal delivery. ZeroCater raised $12 million this month, and earlier this year Canada-based Platterz raised $15 million (USD).
The difficulty for any startup in the lunch delivery space is that there really isn’t a huge point of differentiation around which you can build your company.
Other than competing on price — or perhaps a slightly better user experience — there are not a whole lot of opportunities to innovate. People order food. Food gets delivered. Food gets eaten. Repeat. Office workers will care more about the food that’s delivered than who delivered it.
Layoffs suck. But Peach, which has raised $10.7 million, said the layoffs would return the company to profitability. If it is profitable, the reduction in headcount could make Peach a more attractive M&A target.
UPDATE: An earlier version of this article incorrectly stated that ZeroCater made their own food for delivery. We regret the error.
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