The Great Business Model Correction continues.
Earlier this week, Munchery, one of San Francisco’s many meal delivery startups, finally began to serve lunch in addition to its dinner service— but it’s expanding conservatively. While other so-called “on-demand” food delivery services let customers order food on a whim and deliver it as soon as it’s ready, Munchery customers will have to pre-order lunches the night before, at the latest. What’s more, the company is only making lunch available to office workers whose employers have signed up to regularly order through Munchery, and each day it will deliver the meals all at once—all in the name of efficient operations and predictability.
In other words: Munchery wants to minimize any losses on its new endeavor, unlike competitors that ferry burritos, salads, and everything in between to individual customers.
Thanks to Uber’s success, we’ve seen an explosion of startups over the last several years that let consumers order anything from a ride to groceries to flowers by merely tapping an app.
But these business models have proven much more challenging than they seem. Several have closed shop, and many of the remaining ones are now making significant adjustments in the search of more sustainable businesses—and hopefully, someday, profitability.
With investor appetite for these startups seemingly declining, according to data published in July by CB Insights, it’s no surprise that many are looking for an exit from the venture capitalist subsidy-driven growth that was once popular.
The only remaining question is whether the startups can do it without hiking the price of their services and alienating customers who are not young, Silicon Valley dwellers with a lot of disposable income.
Kia Kokalitcheva
This is the Startup Sunday edition of DataSheet, Coins2Day ’s daily tech newsletter, edited by reporter Kia Kokalitcheva. You may reach me via Twitter, email, or an entirely new platform that your startup developed. Feedback welcome.
Everyone's Talking About
Viv Labs. In a move to directly compete with Apple, as well as Amazon and Microsoft, Samsung will acquire a company founded by the creators of Siri, the virtual assistant acquired by Apple in 2010. Viv's founders have said in the past that their new company's virtual assistant will be even more powerful than Siri. (Reuters)
Unicorn Watch
Pinterest hires its first CFO. The company, best known as a service to collect photos of anything from home decor to cakes, has hired Twitter VP of finance Todd Morgenfeld. (Coins2Day)
Theranos gives up on labs and clinics. A year after a series of Wall Street Journal reports called its technology into question, the blood-testing company announced it's closing its labs and "Wellness Centers" to focus on a new device it will sell to clinics. (Coins2Day)
Snap gets the IPO ball rolling. Snapchat's newly named parent company is reportedly planning a $25 billion IPO for as early as March 2017, though it hasn't hired bankers yet. (Wall Street Journal) (Business Insider)
Blue Apron is on track to hit $1 billion in sales. The meal kit company reportedly has sales that would amount to $1 billion in the next 12 months as it preps for an IPO. A recent report exposed some of the dangerous working conditions at one of its warehouses. (Recode) (BuzzFeed)
The Week in Startups
Target Has a New Website Just for Startups (Coins2Day)
Anchore Nets $5 Million to X-ray and Secure Software Containers (Coins2Day)
Travel App GoEuro Raises Fresh Funds to Expand to 30 Countries (Coins2Day)
Here's How These Hot Startups Are Disrupting the Business World (Coins2Day)
Startups Face Tough Questions and Jokes at Salesforce's Pitch Competition (Coins2Day)
Exclusive: Ex-Yahoo Info Chief's Startup Raises Millions (Coins2Day)
Rover Announces $40M Round for Pet Sitting and Dog Walking (TechCrunch)
Capital One Acquires Online Price Tracker Paribus (TechCrunch)
Buying Washio’s Assets, Rinse Cleans Up Part of the On-Demand Laundry Market (TechCrunch)
Justin Bieber-Backed Shots Prioritizes Making Video For Other Platforms (BuzzFeed)
Words of Wisdom
"One of the problems with raising money is it teaches you bad habits from the start [...] If you’re an entrepreneur and you have a bunch of money in the bank, you get good at spending money." — Jason Fried, co-founder of Basecamp, on the difference between startups that raise funding and those that bootstrap. (New York Times)