As a New Yorker I’m probably biased, but I never really “got” food startups.
To me, they seemed like little more than venture-funded restaurants with the gall to try and master technology alongside cuisine. But when Seamless/Grubhub already offer powerful delivery engines that allow restaurants to focus on cooking food not writing code, why cross the streams?
Of course, $ 200 million in investor money in just three months says I’m wrong.
In the first quarter of 2014, funding for “meal, grocery, and food delivery companies” hit a five-year high, with 50 percent of the food investment over the past two years going toward seed rounds and another 30 percent going toward Series A rounds.
But while a high tide can raise all ships, there are usually a few boats left dead in the water. One of the more notable flameouts was San Francisco’s Chefler, a meal delivery service which despite achieving a five-star Yelp rating and the attention of Gilt Groupe shut down operations after only seven months. As Carmel DeAmicis wrote of the bootstrapped company, “[Chefler] couldn’t hack the price war that started when SpoonRocket’s $ 8-a-meal service expanded to SOMA. The margins on each meal were too small, and Chefler plain ran out of cash.”
That might dissuade some founders from stepping back up to the plate in the same sector, but not Blake Bible and Joe Andrews. Bible, who served as Head of Operations at Chefler, and Andrews, who founded Chefler with Omar Restom, are now the CEO and CTO respectively of Stackd. Stackd is a more health-focused offering than Chefler, but what really sets it apart from the rest of the food startup pack is what the founders call its “modularity.”
Instead of providing a menu of various meals, it gives users the choice between three proteins, three vegetables, and three starches. For example, today’s proteins are a curried fish, almond chicken, and chargrilled steak. Each item, whether it’s a protein or a vegetable dish, costs $ 3, and so three items put the bill at just a dollar over competitor Spoonrocket’s prices. (Other competitors like Sprig have padded their prices with “dynamic delivery fees” — essentially, surge prices).
The fact that Stackd’s meals are so customizable — with even just nine items, the possible combinations add up quick — is a key part of its health focus, Andrews tells me.
“You can customize a meal to your own health goals, what you define as healthy. We all have a different definition of health. Its not trying to prescribe that you should eat this number of calories or this number of carbs.”
The company is also hyper-focused on packaging — each item is packaged separately in such a way that it optimizes for temperature and texture. I raise the point that the environmental impact of excess packaging has become a major concern among the type of people who are conscious of what they put into their bodies — and who are also Stackd’s target users.
Bible says the company opted for plastic packaging as opposed to compostable because the feedback they received from customers was that plastic is preferable because it’s reusable. That said, he’s also considered modeling the service after the dabbawallahs of Mumbai, India, who deliver 160,000 homecooked lunches a day and later pick up the containers to wash and reuse them.
“What we’re interested in exploring,” Bible says, “In other parts of the world, in India and Korea, the serving containers are either made out of metal or plastic and sometimes glass that are left outside after use, and the company comes and picks them up. Right now we’re not set up for that but it’s something we’re very interested in exploring.”
But with Bible and Andrews stepping out of a failed startup in the same space, should investors trust that they can take them home at their second at-bat? Andrews calls the experience he gained from Chefler’s failure a “double-edged sword.”
“On one hand, people will say, ‘Yes, you tried this. It didn’t work out. Why should we give you any money?’ But on there other hand, we know exactly what we’re doing now. We know what did well and we know what we didn’t.” For example, Stackd has abandoned the subscription model of Chefler in favor of on-demand pricing like most its competitors.
And if the on-demand food delivery market is as big as investors think it is? That experience could give Stackd an edge in the ongoing “venture-funded restaurant” wars.
[illustration by Brad Jonas]