f you are not one of a several million Americans who now subscribes to a meal-kit service, the odds are good that eventually you will.
Fifteen years ago the great online food experiment rose and fell as quickly as you could say, “Webvan.” Founded in 1996, Silicon Valley-based Webvan was a darling of the internet and a recipient of almost $400million in equity investment from an all-star cast of venture capital firms. The founder was highly credible, Louis Borders, who previously founded and led Borders bookstores to wild success.
Webvan, HomeGrocer, Peapod and other online grocery stores assumed that the nexus of consumer food demand and the internet was online grocery shopping. They were in the business of “disintermediating” grocery stores. The problem was, people like to shop to see what they are buying. Demand lagged and revenues fell behind expectations. Warehousing and delivering product was expensive and required stupendous investments in infrastructure, inventory and service. When the stock market turned against dot-coms in 2000, venture capitalists were in no mood to carry these red-ink bleeding behemoths. From a high water mark of a $4billion valuation, Webvan crashed and burned in a spectacular return to earth in 2001. Several other companies in this class spun into death spirals, dragged down by the Webvan flame-out. For a long time afterwards, the words “food” and “the internet” could not be uttered in the same sentence without making a venture capitalist wince.
Quietly at first, food has made a roaring comeback on the internet, and in a totally different way than the founders of the online grocery stores expected. People do want convenience, it turns out, but they want finished meals or specialty items delivered to their front
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