Zume, Bay Area-founded $2B pizza startup, reportedly closes
Hundreds of millions of dollars later, the California startup that tried to disrupt pizza delivery has gone belly up.
Zume, which had raised a total of $445 million since its founding in 2015, ceased operations last month and is liquidating its assets, according to a report from The Information. Once based in Mountain View but most recently headquartered in Camarillo, the firm planned to cook pizzas in the back of a massive truck, with robots, while en route to customers’ homes.
In 2016, Zume delivered its first pies, and positive reviews rolled in on Yelp. But Bloomberg reported that the company quickly gave up on the cooking-while-driving model — cheese kept sliding around when the truck hit bumps in the road — and started parking in central locations to send out typical deliveries.
Nevertheless, investors were intrigued — particularly SoftBank’s Masayoshi Son, famous for the $100 billion “Vision Fund” that dumped $4.4 billion into WeWork. Bloomberg reported that Zume CEO Alex Garden was projecting hundreds of millions of dollars in revenue and talking about becoming the “Tesla of fresh food, and the Amazon of fresh food,” trying to get Son to invest.
In 2018, SoftBank poured $375 million into the company, according to Pitchbook, valuing the startup, still with a relatively untested product, at around $2.25 billion.
The money didn’t last. Zume had employees jump from project to project, including a monthslong push to build a sensor that would monitor the heat of food as it was delivered, Bloomberg reported. The firm burned through cash without bringing in much revenue (less than $1 million in 2019, according to Bloomberg), and at the beginning of 2020, Zume quit the pizza game, laid off half of its staff and pivoted into engineering sustainable packaging.
Now, the shuttered firm stands as a prime example of venture capital excess — an expensive, fruitless attempt to supplant an industry that no one really had a problem with in the first place.
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Source: SFGATE
