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Daily news and analysis about the food tech revolution

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London: Uber Eats’ New Restaurant Accelerator Program Will Cover “Gaps” in Food Selection

Say you live in London and really want Malaysian food and really don’t want to get dressed, but you can’t find any spots near enough that they’ll deliver.

That’s exactly the problem that Uber Eats is hoping to solve with its new accelerator program. According to Quartz, the food delivery giant is partnering with London shared kitchen space rental company Karma Kitchen to create a program to help strategically-selected restaurants improve operations.

Uber Eats will sift through customer data to identify “selection gaps” — unmet consumer demand for certain cuisines, dishes, etc. — then will pick five to seven restaurants that fill those gaps to participate in the three-week accelerator. During the program restaurants will receive help from Uber Eats to improve a wide variety of operations — everything from branding to staffing to streamlining workflows to speed up delivery times. After they graduate, Uber Eats will ensure that the restaurants receive enough orders to meet basic costs for six weeks (though the article doesn’t outline how it will do so).

This seems to be separate from but related to Uber Eats’ existing virtual restaurant concept, which sets up delivery only restaurants-within-restaurants based off of foods that are rising in popularity. Instead of adding a new type of cuisine to existing restaurants, Uber Eats is finding restaurants that serve an unmet need and teaching them how to get better at delivery (or possibly start doing it in the first place.)

When I first read about Uber Eats’ new program, I immediately thought of Deliveroo’s Editions. Deliveroo Editions is a curated hub of delivery-only restaurants which operate out of shipping container clusters built and operated by the company. Deliveroo gathers data to figure out what cuisines consumers want but don’t have access to, then invites those restaurants to set up shop in one of their Editions parks. Restaurants get low overhead, Deliveroo gets to edge out other delivery services to serve customers exactly what they want.

While it shares the same end goal (closing selection gaps with exclusively signed restaurants), Uber Eats’ new program stops way short of Deliveroo’s offerings. Instead of doing all the work to build out and operate physical ghost kitchens, it simply puts targeted restaurants through an accelerator program. Since it’s partnering with Karma Kitchen, it doesn’t even have to provide space.

Deliveroo Editions.

It’s a no-brainer for restaurant delivery companies to use data to try and meet unmet consumer demand for certain food types. What’s less clear is if Uber’s strategy to do so through accelerating restaurants will have the desired result.

The program is only three weeks long, which is a pretty short amount of time to teach restaurants how to do everything from effectively staff to pass food hygiene inspections to use accounting software. Then again, these are presumably things that restaurants already know how to do — so maybe the abbreviated timespan is just meant for Uber Eats to help them do these things better?

I’m also curious if there is any sort of follow-up support involved, though it wasn’t noted in the Quartz article. Similarly there was no mention of financial investment. Most importantly, there was clarity on whether or not Uber Eats will have exclusive delivery privileges for participating restaurants post-program, though it would be odd for the company to go to the trouble of creating an entire accelerator if that wasn’t the case. [We’ve reached out to Uber Eats and will update the post if we hear back.]

Deliveroo’s Editions program has a more clear payoff — it gets exclusive delivery privileges for all restaurants in the Editions parks. However, it also has to put in a larger investment. The delivery company has to actually build out physical kitchen spaces, and also manage all operations cost (electricity, gas, etc.). With Editions, Deliveroo also takes on the risk that not all their selected restaurants will do well (though presumably if they don’t Deliveroo can cut them from the Editions lineup).

News of Uber Eats’ accelerator comes as competition in the U.K. delivery space heats up. Now that Amazon Restaurants is out of the game, the biggest remaining players are Uber Eats, Deliveroo, and Just Eat. Uber Eats is, well, Uber Eats, and has all the massive name recognition, data, and funding that comes along with that. It’s also currently piloting ghost kitchens in Paris. But Deliveroo is no slouch: it recently got a hefty investment of from Amazon (though it’s under scrutiny now), and just last week launched a procurement platform to supply its restaurants with discounted ingredients and supplies. For its part, Just Eat has been making acquisitions in corporate catering and restaurant tech, but recently its growth has slowed and earlier today news emerged the company just made a round of layoffs.

If successful, Uber Eats hopes to run the program several times per year. I also wouldn’t be surprised to see the third-party delivery company bring it to the U.S. After all, Uber Eats needs to use every possible weapon in its arsenal to compete against the likes of DoorDash, Grubhub, and Postmates — and, as Deliveroo Editions hasn’t made its way across the pond, filling selection gaps seems a smart way to stand out.

Updated: Food Delivery Service Just Eat Lays Off Staff Amid Redundancies

UK third-party food delivery service Just Eat has made a round of layoffs in the UK and Ireland following the recent merging of its customer and restaurant operations teams. TechCrunch reports that while it’s unclear how many individuals are affected, it could be “as many as 100 staff overall.”

At the end of May, Just Eat united its separate customer and restaurant support divisions under a single operation, creating numerous redundancies in the process. This round of layoffs, according to TC, was announced internally on Friday and is meant to do away with those redundancies as part of a larger corporate reorganization.

A Just Eat spokesperson declined to comment to TechCrunch on the actual number but did confirm the reorganization, noting that, “At our full year results we talked about organising and energising the business to execute our strategy at pace.”

The news comes right after Just Eat, who is based in London but operates throughout the UK and in several other countries, acquired corporate catering marketplace City Pantry. Previously, Just Eat had acquired Flyt and Practi, both restaurant-tech-focused companies.

Meanwhile, Just Eat has also faced backlash from investors this year as the company’s pace of growth has slowed. In February, activist investor Cat Rock Capital Management LP, who owns a 2 percent share in Just Eat, urged the company to “merge with a rival online meal-delivery company,” in the wake of Just Eat’s inability to find a permanent CEO after Peter Plumb stepped down and was replaced by interim CEO Peter Duffy. While Just Eat has yet to find that permanent CEO, TechCrunch also reported that Graham Corfield, previously Just Eat’s UK Managing Director, has been appointed to the role chief operating officer.

And despite Just Eat’s recent acquisitions, which suggest growth into new areas, the company has been under some heavy pressure in 2019 not just from investors but competitors as well. Amazon’s recent (and somewhat controversial) investment in Deliveroo further intensifies that competition, particularly as Deliveroo tries to take over more and more of the food delivery stack by offering its restaurants everything from cheaper ingredients to wifi services.

Just Eat’s previous aforementioned acquisitions have been focused mainly on technology that powers the delivery process. Whether that’s enough to give the company a fighting chance against Deliveroo’s operation remains to be seen.

Update: An earlier version of this post incorrectly stated that Graham Corfield had been appointed to the role of chief executive officer.

Deliveroo Launches Procurement Platform to Supply Restaurants With Discount Ingredients

Deliveroo this week launched Food Procurement, a platform on which the third-party delivery service’s partner restaurants can purchase ingredients and supplies at discounted prices. It’s part of what appears to be the company’s aim to become a one-stop-shop for restaurants, where Deliveroo would provide not just drivers to shuttle food orders to customers, but also vital pieces of restaurants’ infrastructure, from internet to real estate to equipment.

With the Food Procurement platform, Deliveroo buys ingredients on behalf of the restaurants, leveraging its scale and purchasing power to negotiate better deals with suppliers. Deliveroo then negotiates its own contracts with the restaurants, who get a better rate on ingredients and items like cleaning supplies and packaging products.

As Ajay Lakhwani, VP of new business at Deliveroo, said in a statement, “By using our size and scale to negotiate great prices we can both simplify the procurement process and help independents and chains can make big savings.” Deliveroo has been piloting the platform for the last year and says it can save restaurants up to 20 percent of their total ingredients bill.

While partner restaurants are not obligated to sign up for the Food Procurement platform, several hundred already have.

Amid Brexit concerns, food prices in the UK are soaring currently, which makes Deliveroo’s platform an attractive prospect, especially for mom-and-pop restaurants with tighter margins who don’t have the purchasing power to sway suppliers into cheaper ingredient prices.

The platform also underscores Deliveroo’s aforementioned aim to be more than just a delivery partner to restaurants. The company has struck numerous partnerships with third parties to offer discounts to restaurants on everything from print services and energy costs to wifi and waste management.

While those perks will inevitably save restaurants on costs, they also shift more power into the hands of Deliveroo. Such a shift definitely has its ups and downs for both sides. It’s also probably something we’ll see more of in future. As I wrote in March, when rumors of Uber-operated ghost kitchens surfaced, “it’s not hard to imagine a third-party delivery service taking over more of the operations up and down the operational stack.”

The launch of Deliveroo’s procurement platform comes right on the heels of news that that the service’s recent investment from Amazon is now being scrutinized by the UK government’s Competition and Markets Authority (CMA). The Food Procurement platform doesn’t appear to be affected by this scrutiny at the moment.

Call for Grubhub Antitrust Investigation Suggests Deep Scrutiny of Third-Party Delivery Is On the Way

DoorDash may have knocked Grubhub out of the top spot overall for U.S. market share of third-party food delivery, but in NYC, the latter is still king. And a growing number of parties are starting to take issue with that. Case in point: Grubhub took another blow at the end of last week when a New York City council member called for an antitrust investigation into the company.

In a letter dated July 2 and obtained by the New York Post, Mark Gjonaj, head of the City Council’s Committee on Small Business, asked New York Attorney General Letitia James to open the investigation and revisit the 2013 settlement agreement that allowed Grubhub to purchase Seamless.

“While I am not accusing any entity of committing unlawful acts, I do believe that Grubhub’s outsized market share and heavy-handed tactics could lead to artificially reduced competition which in turn may drive up the commissions paid by struggling locally owned restaurants,” Gjonaj wrote.

Currently, Grubhub controls 69 percent of the food delivery market in NYC, according to Gregory Frank, an antitrust lawyer who testified at the June oversight hearing in NYC that addressed concerns over the commission fee Grubhub and other third-party delivery services charge restaurants.

The call for an antitrust investigation comes on the heels of a report that Grubhub has been buying website domains by the thousands and creating so-called shadow sites without those restaurants’ knowledge. At the same time the New York State Liquor Authority is creating new rules that could cap the fees Grubhub can charge its participating restaurants to 10 percent. Currently, those fees range anywhere from 15 to 30 percent. Grubhub has denied those accusations.

Grubhub isn’t the only player in the third-party delivery space currently under scrutiny. Earlier this month, the UK government’s Competition and Markets Authority put the brakes on Amazon’s minority investment in Deliveroo while it investigates potential breaches of competition rules.

Third-party food delivery apps were recently predicted to have 44 million U.S. users by 2020. More lawmakers are stepping in to regulate the market, combined with others questioning the economics of third-party food delivery, and still others urging brands to pull their delivery programs back in house suggest the honeymoon period for third-party is over. Massive players like Grubhub aren’t going anywhere anytime soon, but they’ll likely be operating under far more scrutiny from government bodies and civilians alike going forward.

British Regulators Eye Amazon’s Investment in Deliveroo

There is a certain level of irony in the fact that as America wrapped up celebrating its independence from Great Britain, British regulators were clamping down on one of America’s most influential companies.

The Guardian reports that Amazon’s recent minority investment in UK-based food delivery service, Deliveroo, is now being scrutinized by the UK government’s Competition and Markets Authority (CMA).

There were “reasonable grounds,” according to the CMA, to suspect that Amazon and Deliveroo could “cease to be distinct.” The CMA has ordered that any further integration between the two companies must be paused as the government investigates whether any competition rules were broken and determines whether it will launch a full merger inquiry.

Amazon was part of a $575 million Series G round of investment in Deliveroo earlier this year. The investment came after Amazon failed to gain any traction for its Amazon Restaurants delivery service in Britain, and shut it down.

With the CMA order, Deliveroo is prohibited from engaging in activity that “could lead to its integration into Amazon’s business while the regulator makes its decision,” reports The Guardian. This includes changes to big contracts or senior management without permission from the CMA.

The CMA’s move is part of a larger backlash growing against Amazon, whose massive size and influence has spooked state and city regulators here in the U.S. In May, under growing pressure from multiple city governments, Amazon dropped its no-cash accepted policy at its nascent chain of Go stores. And at the beginning of the year, Amazon decided to abandon plans to build a second HQ in New York after facing protests from lawmakers and activists there.

In another bit of irony, while the CMA’s move against Amazon serves to protect competition in the UK, we at The Spoon saw Amazon’s investment in Deliveroo actually as a way for the two companies to meaningfully break into the U.S. market.

Taster Raises $8M in New Funding for Delivery-Only Brands to Europe

Taster, a French startup who creates restaurant brands made specifically for delivery, has raised $8 million in a new funding round. The round was led by Battery Ventures, with participation from existing investors Heartcore Capital, LocalGlobe, GFC and Marc Ménasé. This brings Taster’s total funding to $13.1 million.

The company currently owns and operates three “restaurants,” which it runs out of ghost kitchens in Paris, London, and Madrid. Out Fry is a Korean Fried Chicken concept, O Ke Kai specializes in Hawaiian food, and Mission Saigon makes Vietnamese fare.

Founder Anton Soulier got the idea for Taster after working at Deliveroo and becoming disenchanted with the quality of the food in the delivery realm. Taster, which he founded in 2017, works with Michelin Star chefs to keep the food as high-quality as possible, and locally sourced, too. The company works out of 12 different kitchens across Paris, London, and Madrid, though it doesn’t actually own the facilities. Instead, Taster partners with companies like Travis Kalanick’s CloudKitchens, who rent ghost kitchen space out to restaurants.

For the actual delivery part, Taster works with Deliveroo, Uber Eats, and Glovo, which means it doesn’t have to manage the logistics behind that part of the operation, and can instead focus on what goes on in the kitchen.

Taster is one of a few companies in Europe building a business off delivery-only restaurant concepts. Frichti is a fellow French startup, delivering pre-made meals customers heat up. It’s notable in particular for owning and operating the full delivery stack, from taking orders to making the food to cycling it over to your apartment.

Elsewhere, Berlin, Germay-based Keatz recently raised €12 million for its virtual kitchen network, which it uses to create in-house restaurant brands much like Taster.

To date, Taster says it employs 115 people, 100 of whom work in the kitchens. The company has already developed some tech that streamlines back-of-house operations like inventory management, supply chain, billing, and integrating delivery platforms. Taster says the new funds will go towards launching three new food brands by the end of 2019 and the company plans to hire more talent in tech and engineering, as well as supply chain and marketing.

Update: Amazon to Invest in Deliveroo

UPDATE: Deliveroo confirmed this funding via press release sent out today. From that announcement:

  • Amazon is set to be the largest investor in Deliveroo’s Series G funding round
  • Deliveroo is raising a total of $575MM with participation from Amazon alongside existing investors T Rowe Price, Fidelity Management and Research Company, and Greenoaks
  • Deliveroo will invest heavily in expanding the company’s tech team at its UK Headquarters, expand further to reach new customers, and continue innovating through its delivery-only super kitchens, “Editions”

Original post:

Amazon is in negotiations to invest hundreds of millions of dollars in UK-based food delivery service Deliveroo, according to a report in Sky News. If true, Amazon’s money would be part of a larger £450 million (~$575M USD) fundraise by Deliveroo.

Deliveroo has raised close to a billion dollars already, and Sky’s sources were unable to peg a clear valuation on the company if this new round goes through. Deliveroo was valued at $2 billion during its last round of funding a year and a half ago.

For Amazon, this deal is basically an if-you-can’t-beat-’em-buy-into-’em strategy. In November of last year, Amazon shuttered its Amazon Restaurants delivery service in the UK after two years of trying to break into that market. As my colleague, Catherine Lamb wrote at the time:

Despite its big name and massive reach, it seems Amazon Restaurants couldn’t compete against existing food delivery companies in the U.K. like Deliveroo and Uber Eats. Since 2013, Deliveroo has carved out a sizable chunk of the U.K. food delivery market and become one of the fastest-growing tech companies in Europe. The company also differentiates themselves with their Editions project: geographically-targeted hubs of delivery-only cloud kitchens Deliveroo began rolling out in 2017.

Speaking of Uber Eats, Deliveroo’s reported fundraise comes on the heels of Uber’s IPO. Though Uber’s IPO was anemic, it still raised $8.1 billion that will help fuel Uber Eats’ expansion to 700 cities from the current 500.

Additionally, Uber is looking to expand into other food verticals, including cloud, or “ghost” kitchens, that would house delivery only restaurants that are only available on the Uber app. The company has even reportedly started leasing space in Paris to build out such a ghost kitchen.

This move into the virtual restaurant game would then pit Uber Eats against Deliveroo not only for restaurant delivery dominance, but also makes a play for Deliveroo’s own ghost kitchen program: Deliveroo Editions.

An influx of cash (sprinkled in with some Amazon-style know-how), then, puts a few more arrows in Deliveroo’s quiver to put up a bigger fight. Or, as my colleague, Catherine pointed out, bring the fight to the U.S., where Deliveroo isn’t active yet.

*The headline for the original version of this post said Amazon invested hundreds of millions in Deliveroo when that was still the report. We updated the headline to more accurately reflect the story.

Eatsa Unveils New Features for Virtual Restaurants, Powers Deliveroo’s Food Hall

Restaurant automation company eatsa announced yesterday a new suite of products aimed specifically at virtual restaurants and delivery-only restaurant concepts. Third-party delivery service Deliveroo is the first to use the technology, at its new food hall in Singapore.

This is eatsa’s first foray into virtual restaurants, also called ghost kitchens, which are basically restaurant-grade kitchen spaces with no dining area and, most of the time, not even a pickup area. More and more restaurants are using these to offload delivery orders from the main kitchen or test out new food concepts. Some restauranteurs also use them to kickstart a brand in a cheaper, less risky way than would be with a full-service operation.

To that end, eatsa’s new tech suite is all about making the prep, pickup, and delivery of food more efficient. New software, called the Omnichannel Intelligent Queue Software, calculates the exact status of an order based on kitchen throughput. With that capability, the eatsa app can give a customer a minute-by-minute status update. For drivers, this more precise ETA helps them know exactly when to get to the restaurant to pick up the food, so it doesn’t sit for too long.

Drivers also get some directional help via the new features — literally. Eatsa’s already known for its digital status boards it has up in restaurants. A version of these will be in the virtual kitchens, along with pickup stations. Eatsa’s shelf-like surfaces that are controlled by sensors and can display the name on the order as well as branding for the third-party service delivering the order.

The first customer for eatsa’s new features is Delveroo, who just opened another Editions site, at Alice @ Mediapolis in Singapore. Customers can order delivery or pickup from the food hall, which features 10 kitchens serving Korean, Vietnamese, Greek, and Japanese food (among other types). In the case of pickup, customers order at self-service kiosks in the hall and retrieve it from one of eatsa’s cubbies, which function much the same way as the aforementioned shelf system.

Companies across the delivery chain are now involved in virtual restaurants and ghost kitchens, from companies like Kitchen United, who rents out kitchen space, to Uber Eats, who might start peddling its own restaurants and food concepts via ghost kitchens.

Eatsa has already teamed up with a few notable names over the last couple years, for traditional restaurants, including Wow Bao in Chicago and MAC’D in San Francisco. The eatsa tech’s popularity is said to be soaring, and expanding overseas and teaming up with a high-profile company like Deliveroo seems to prove that point.

It’s smart for the company to move into the virtual kitchen space, where it’s tech could help it stand out quite a bit. As CEO Tim Young told me a while back, the company’s system is designed to make restaurant operations easier and more efficient, and it’s end-to-end, which means you can roll up every step of your operation into a single system. As restaurants large and small adjust to a world where mobile order and delivery needs to be as efficient as in-house dining, an all-in-one automated platform like eatsa’s could solve several problems at once.

Subscription Models Are the Future of Third-Party Food Delivery

When Postmates started delivering Starbucks back in 2015, the deal came with a glaring drawback: Postmates’ $5.99 delivery fee applied to any order, even if it was a single beverage. While it was fun and novel to try getting a tall latte delivered to the office once, just to say you did, most of us wrote the concept off as impractical and unsustainable.

Times have changed. Coffee delivery with reasonable delivery fees is now a thing, along with smoothies, Big Macs, $1.19 bean burritos, and pretty much anything else you can imagine. That’s thanks to the fact that off-premise sales are now 38 percent of total restaurant sales and growing, and, according to a recent forecast by Technomic, much of the growth comes from the rise of third-party delivery sales.

That makes now the perfect time to rethink delivery fees, and a growing number of companies are now looking to the subscription model.

Think Netflix for food delivery: You sign up for a monthly membership, and in return get unlimited delivery on food in your area. For third-party services, the subscription route offers users competitive pricing options that will (hopefully) keep the diehard delivery fans loyal to the service. In its forecast, Technomic noted that “subscription models that eliminate per-delivery fees in favor of a flat-rate subscription will emerge to present a clearer value proposition to customers.”

As this is a fairly nascent practice, it’s far from perfect at the moment, with restrictions and limitations that could put some people off. But the mere fact that most of the major delivery players now have some presence in the subscription model space suggests it’s an area of delivery we should watch closely over the rest of 2019. Here’s what folks are up to:

DoorDash unveiled its DashPass in August of 2018. For a monthly fee of $9.99 you can order as much delivery from participating restaurants as your heart desires and your pocketbook can manage. In a blog post, DoorDash called out some big-name chains as participants, such as Wendy’s, The Cheesecake Factor, and White Castle, suggesting major restaurants are at least partially on-board with the subscription-style business model.

Right now there are a couple restrictions with DashPass: orders have to be over $15 to qualify for DashPass, and the pass only applies to certain restaurants. For example, I’m writing this post from Nashville, TN, where DoorDash tells me 110 restaurants are available for DashPass, which is hardly the extent of Music City’s culinary landscape.

Postmates offers a similar service, and has done so since 2016. For $10 per month, you can use the Plus Unlimited service for delivery orders over $15. As with DoorDash, the program only applies to those restaurants participating, which limits your options somewhat. Postmates also promises member deals and discounts.

In the UK, Deliveroo rolled out a subscription service last year called Deliveroo Plus. At £7.99/month, it’s a steal for anyone ordering just a few meals per month. (Deliveroo typically charges a £2.50 delivery fee per order.) There’s no order minimum, either, making Deliveroo’s service something like the Amazon Prime of food delivery.

Uber Eats started testing a loyalty program in the UK last year that would potentially do away with delivery fees. Thus far, it hasn’t come Stateside. Grubhub, still the leader in third-party food delivery, hasn’t yet dabbled in subscriptions, either. But I wouldn’t be surprised if either of those two have something in the works.

The key to a successful subscription offering will ultimately lie in how much choice services can offer consumers while still providing a delivery-fee-free package. If that’s pie-in-the-sky thinking at the moment, I doubt it stays that way for long.

Deliveroo Goes Back to the Future with Brick and Mortar Food Hall

You know how they say that in fashion, everything old comes back around and eventually is new again? It seems that the same might be true for restaurants.

This week London-based food delivery startup Deliveroo opened up its first brick-and-mortar location in Hong Kong (h/t CNBC). The so-called Delivery Food Hall is home to five restaurant groups which offer 15 dining concepts in total.

The new venture is an extension of Deliveroo’s Editions program, which manages hubs of cloud kitchens made up of restaurants hand-picked by Deliveroo to serve local consumer demand. However, while the Editions restaurants are strictly delivery-only, the 15 dining spots in the Delivery Food Hall will offer both delivery service and a consumer-facing storefront. It’s also akin to the similarly-named Deliveroo Food Market service, which lets customers roll up items from different restaurants into a single delivery order. Deliveroo already has plans to open up a second Food Hall location in Singapore, and will expand globally if all goes well.

I’m kind of unsure how to feel about Deliveroo’s new brick & mortar concept. On one hand, opening up the Editions hubs to people IRL seems like a good idea. In the Future of Restaurants panel during our L.A. Food Tech Meetup, Kitchen United (KU) CEO Jim Collins touched on the struggle of teaching consumers about the delivery-only aspect of a cloud kitchen. He told the story of two older women who walked into the first KU location on its opening day and ordered soup, not realizing that it was not a food hall but a commercial kitchen space for restaurants to prepare food for delivery. This new hybrid concept by Deliveroo seems like it would solve that problem.

However, it will also create new problems. The hall will need staff to take customers’ orders, call out the food when it’s ready, and clean up — none of which they would have to do in a pure cloud kitchen. That likely means more employees, as well as potential investments in things like dishware. To avoid this problem Deliveroo could use self-serve kiosk ordering (I didn’t see any indication that they were already doing so) and use to-go containers, minimizing extra asks of the staff. But if the experience isn’t pleasant for diners, they’ll have difficulty building any sort of loyal dining-in customer base.

In the end, this concept doesn’t seem that all that different than a typical food hall. Many restaurants within food halls already offer delivery in addition to serving in-store customers, so there’s not really a unique value-add here. The point of cloud kitchens is that a restaurant can operate without worrying about building out things that dine-in customers enjoy, like counters and stools and visually appealing chalkboard menus. By adding back in the service aspect, Deliveroo has basically created a food hall that happens to put a lot of emphasis on delivery.

It’s obviously too early to see how this experiment will pay off, if anyone can make it work, it’s Deliveroo. The startup has widespread name recognition, serving 13 territories globally with over 100 restaurants in its Editions hubs. It also has a pretty healthy warchest, having raised almost $860 million in funding according to Crunchbase.

Thus far Deliveroo has been able to stay competitive with giants like Uber Eats and Amazon Restaurants by thinking creatively and shaking up the delivery game. The Delivery Food Hall is another bid by Deliveroo to shape the future of dining — by borrowing from the past.

Amazon Shutters U.K. Restaurant Delivery Service After Just Two Years

Amazon may seem like an unstoppable behemoth taking over everything from groceries to gizmos, but it seems the delivery giant is not completely immune to failure — especially when it comes to the competitive food delivery market.

Last week, Amazon quietly shuttered its restaurant delivery operations in the U.K., informing customers via email that they would “no longer be able to order from Amazon Restaurants UK after Monday, 3rd December” (hat tip to the Evening Standard). This news comes only two years after Amazon launched the delivery service — available through its £79 ($101) per year Prime Now app — in select areas of London. Amazon guaranteed food delivery within the hour, and originally offered free delivery for orders over £15 ($19 USD) (it later changed that to a £1.99 flat fee for all orders).

Despite its big name and massive reach, it seems Amazon Restaurants couldn’t compete against existing food delivery companies in the U.K. like Deliveroo and Uber Eats. Since 2013, Deliveroo has carved out a sizable chunk of the U.K. food delivery market and become one of the fastest-growing tech companies in Europe. The company also differentiates themselves with their Editions project: geographically-targeted hubs of delivery-only cloud kitchens Deliveroo began rolling out in 2017.

Editions uses customer feedback and user data to pinpoint exactly which restaurants lacking in certain areas, or which types of cuisine are popular. It then entices restaurants to join their cloud kitchen hubs and set up delivery-only operations. Since Deliveroo sets up and owns the hubs, they have exclusive rights to deliver food from all the restaurants within them — which means more market share for them, and less leftover for Amazon. So instead of just signing on popular restaurants, like Amazon did, Deliveroo creates them in the exact areas with the greatest demand.

Amazon Restaurant and Uber Eats both launched in the U.K. around the same time. But while the former is closing up shop, Uber Eats is reportedly planning to launch 400 “virtual restaurants” in the U.K. by the end of this year to compete with Editions. Instead of building their own cloud kitchen facilities, Uber Eats will operate these restaurants in existing space within kitchens that already partner with Uber Eats for delivery. The company also recently launched 24-hour delivery, which had Deliveroo quickly promising the same thing in the near future.

It seems that Amazon’s name recognition and promise for one-hour delivery wasn’t enough to succeed the crowded U.K. food delivery market. With players like Deliveroo and Uber Eats already established in the space, the company would have needed some serious innovation, to carve out a space for itself.

Stateside, however, Amazon stands a better chance. The U.S. has a bigger food delivery market and a wider competition pool, which may work in Amazon’s favor.

Tom Parker, Senior Corporate Communications Manager of Amazon, UK & Ireland, reached out to us with this comment: “We are closing Amazon Restaurants UK. We would like to thank all of our customers and merchants, and delivery partners for their support.”

Food Tech News Roundup: Goodbye Seattle Straws, Corporate Catering Raises, Deliveroo Expands Editions to France

What a strange/wonderful/fireworks-filled week. With a holiday smack-dab in the middle of the Monday through Friday grind (did you read our piece on how to have a Food Tech Fourth?), we’ve been feeling the summertime hazies a little stronger than usual. How about you?

But food tech news stops for no holiday! So we’ve rounded up a few of the buzziest stories that caught our eye around the web this week. Best read while eating a popsicle.

Bye, plastic straws!

In Seattle, no more plastic straws or utensils
On July 1st Seattle’s ban on plastic straws and utensils went into effect, making it the first major U.S. city to ban the single-use plastics in foodservice in an effort to reduce their negative environmental impact. Any restaurant or coffee shop still serving up plastic utensils will be subject to a fine of up to $250. Around the world, cities and countries are working to ban plastic straws, bags, and utensils. Seattle will be our first major test case to see if these types of restrictions can hold water in the U.S.

 

Corporate catering startup HungerBox nets $4.5 million
This week Bangalore-based startup HungerBox raised $4.5 million in Series A funding led by NeoPlux and Sabre Partners. Founded in 2016, the B2B company coordinates food catering for large corporations. They plan to use their new capital to expand throughout India and further into the Southeast Asian market. Just last week two U.S. startups focused on corporate catering also raised some capital, with ezCater snagging $100 million and Hungry raising $1.5 million.

 

An Editions site in London.

Deliveroo launches Edition kitchen in Paris
On Tuesday food delivery company Deliveroo opened up their first Editions food hub in Saint-Ouen, just outside of Paris. If you didn’t know, Editions projects are essentially curated clusters of cloud (delivery only) kitchens. This is Deliveroo’s first Editions location in France and houses 12 restaurants. The Editions model has proved successful in London, where Deliveroo is based, as well as its other locations in Singapore and Australia — and it shows no signs of slowing down. (If you missed my conversation with Deliveroo’s Dan Warne at SKS Europe, you can see it here).

 

Food robots are hot

Otto changes name to Vivid Robotics, picks up $4.9 million from Vulcan

It’s always easier to change your name when you do it before you come out of stealth, and that’s exactly what Otto Vivid Robotics just did. The Seattle based robotics startup is changing its name at the same time it picks up an additional $4.9 million in funding. The new round had a total of 19 investors, with Paul Allen’s investment arm, Vulcan, acting as lead. Vivid CEO Garett Ochs explained the name change to Geekwire, “We’re going to be creating products for food, and we’re also going to be creating other things. We wanted to do rebranding so we are set up for a more streamlined approach to a divergent future.”

Just a reminder: we’ll be in Providence, Rhode Island on July 17th talking about the future of seafood at Providence Pilotworks. Join us if you are looking to get your foodtech fill and have a conversation about the future of seafood.