Deliveroo made its first known acquisition in the technology space today.
The London-based firm, founded by Will Shu in 2012, snapped up New York-based food delivery startup Maple in a deal that will see the latter’s team become part of the UK firm’s operations in London.
But what do we know about Maple so far? The firm was founded in 2014 by Akshay Navle, a former e-commerce consultant and Caleb Merkl, a Harvard Business School graduate, and launched in April 2015 during what is widely referred to as Manhattan’s online food delivery boom.
Like Deliveroo, Maple set out to disrupt the online food delivery space in New York. Unlike Deliveroo, which has raised a staggering $474.59m, Maple raised a somewhat more modest $29m throughout its relatively short existence.
Maple closed a $4m Seed led by Thrive Capital in November 2014. A few months earlier, in July, Deliveroo had managed to woo investors, raising a £2.7m Series A from lead investor Index Ventures.
Deliveroo, which has received its fair share of negative attention in recent months, would then go on to close increasingly successful funding rounds. It announced a $25m Series B in January 2015, followed by a $70m Series C in July, a $100m Series D in November and made headlines last August with its $275m Series E.
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Maple raised its last known round in March 2015, closing a $25m Series A from lead investor Greenoaks Capital.
Although the news of Maple’s closure may have taken some people by surprise, a piece by Quartz’s Alison Griswold said the firm had been struggling for a while.
“It was a bad sign when Mapple took away the cookies. From the start, Maple, a New York food delivery startup backed by famed restaurateur David Chang, had included a complimentary maple sugar cookie in every order.
“The ‘Sugar Shack’ cookie was a sweet, chewy concoction, made specially for Maple by award-winning pastry chef Christina Tosi. But earlier this year customers were dismayed to find the company had replaced the cookie in their meals with a brochure bearing a glossy photo of one,” Griswold wrote.
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She went on to note that Maple had used the back of the brochure to detail how it was planning to move away from artificial ingredients in an attempt to fulfill its goal of providing “good simple food” to its customers.
Maple’s cookie, made using refined white and light brown sugar, may have developed a cult following, “but sugar was not the only problem”, Griswold added.
Prior to being acquired, Maple had raised its prices by quietly adding a delivery fee and changing the way it calculated sales tax.
Aside from the $25m Series A closed in 2015, Griswold noted sources close to Maple said it had closed another round – albeit undisclosed and at a significantly lower valuation. The firm was also $10m in debt and its sales had plummetted by 41% between March 2016 to March 2017.
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Sources cited by Griswold also said Maple failed to become profitable on a per-order level.
Then came the announcement. In a blog post published yesterday (8th May), Maple’s co-founders detailed the reasons why the firm would cease operating in New York – incidentally the only city where it was active in the first place.
“We set out two years ago with a big idea about a new approach to food delivery and the lofty ambition of turning an industry on its head. Since then, we’ve accomplished many things we’re incredibly proud of.
“We built a brand that struck a chord with our customers and developed hundreds of menu items, allowing us to serve millions of meals to supportive and loyal customers such as yourself.
“We built some truly exceptional software, allowing us not only to collect, bundle and route orders with unprecedented throughput, but to drive efficiency at every step of our process – from ingredient sourcing, all the way through delivery completion (resulting in over a million miles logged by our delivery team members),” reads the announcement.
Despite all of Maple’s victories to date, the founders noted they had many challenges yet to overcome and following months of soul searching, the entrepreneurs say they realised something needed to change.
“The more time we spent trying to answer this question, the more evident it became that of all the paths we had contemplated, the most compelling next step in Maple’s story involved a shift from our current approach.
“While an incredibly difficult decision for us given the effect on our core operations, it became clear that we needed to close the Maple operation here in New York and look for a partner with and look for a partner with scale – one that would allow us to leverage all that we had built across a broader platform,” the post adds.
Deliveroo may struggle to get its drivers and UK MPs on its side, but the one thing it certainly has is scale and having this in a market which reportedly contributed £9bn to the UK economy in 2014 is certainly a powerful thing.
The UK tech behemoth may be busy competing against the likes of UberEats, which admittedly got off to a rocky start in the UK, as it strives to capture as much of the market as possible, but one cannot help but wonder whether this is the beginning of Deliveroo’s acquisition drive and if so, who’s next?