By CB Insights.
Food delivery startups originally became popular among VC investors in the early 2010s, with many large players such as Blue Apron ($2B valuation) quickly reaching high valuations, thus encouraging more new competitors to enter the market. However, as competition has increased and startups have struggled to find a financially viable business model, the challenges of food delivery have become more apparent to investors and activity in the space has begun to cool.
Most recently, Munchery made headlines for a recapitalization financing worth $5.6M led by Menlo Ventures and Sherpa Capital. The recapitalization was seen as a last resort by the company to attract investors after a turbulent year in which the company burned through much of its cash and laid off employees. The new financing has lowered Munchery’s valuation to $80M from $300M.
In a climate in which an increasing number of food delivery startups have been acquired or died, we took a look at how the once-overcrowded food delivery market has changed over the past few years.
Read more at CB Insights.