The economics of 15-minute delivery are… interesting

Fridge No More was recently losing $3+ per order, excluding the $70 it was spending to acquire each customer.

Gopuff, DoorDash, Gorillas, Jokr, Getir, and Buyk may sound like Pokemon, but Pokemon don’t lose money delivering groceries.

The economics of 15-minute delivery are… interesting

These companies promise near-instant delivery, and they’ve raised $5.5B+ in VC money since 2020.

But the economics are sketchy, at best. Last year, Fridge No More was losing $3+ per order, excluding the $70 it was spending to acquire each customer.

To deliver quickly, you need hyperlocal warehouses, instant labor, and, ideally, high-value non-perishable products. “If it’s a toothbrush and banana, that’s not going to work,” one industry insider told WSJ.

The idea is that with enough scale — and the right items — some companies could turn profitable. But it’s likely many will turn out like Kozmo.com, which shut its doors in 2001 after raising $200m+ a year earlier to deliver goods in one hour.

New call-to-action
Topics: Delivery

Related Articles

Get the 5-minute news brief keeping 2.5M+ innovators in the loop. Always free. 100% fresh. No bullsh*t.