Maple, a New York City startup that had essentially built a delivery-only restaurant inside of an app, has shut down, the company announced to customers today.
The food-delivery startup Maple has shut down
Leaked documents last year showed the company was in trouble.
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
The company had raised around $50 million, and possibly even more, in venture capital, and had chef David Chang of Momofuku fame advising it. But it had struggled to keep costs in check and prices affordable, leaked documents previously published by Recode showed.
In a note to customers on Monday, the company said “some members of the Maple team will join Deliveroo operations in London, and our technology will be used to help accelerate growth and efficiency across the platform.” Deliveroo is a heavily funded European food-delivery startup.
A Maple representative told Recode that the company’s co-founders, Caleb Merkl and Akshay Navle, as well as Chief Technology Officer Dan Cowgill, will be joining Deliveroo in London. Some other Maple employees may end up moving over, too.
With the shutdown, Maple becomes just the latest in a string of VC-backed food delivery startups to go under. SpoonRocket went out of business and Munchery has struggled.
These companies save money compared to traditional restaurants by not having to pay for brick-and-mortar storefronts. But it is expensive to retain and attract customers as a digital business, and the economics of on-demand delivery continue to be difficult to overcome. It doesn’t help that these companies have relatively low average order values for an e-commerce business.
In 2015, Maple was losing money on an average order, leaked documents showed. By March of 2016, gross margins were still just 2 percent.
Part of the company’s original pitch was that customers would pay a fixed price for a lunch or dinner meal that included all fees and tips. But last year, the company added a $1.95 delivery fee, a sure sign that the original model was not sustainable.
Maple was incubated inside of Thrive Capital, Josh Kushner’s well-regarded venture capital firm. The company’s other investors included Greenoaks Capital.
This article originally appeared on Recode.net.
