Grocery delivery startup Food Rocket has ceased operations after exhausting its funding, the company said.
“In spite of overall profitability, Food Rocket ran out of capital while struggling to raise additional funding,” it said. The recent downturn in the capital market made it difficult to get a bridge from its investor retail company Alimentation Couche-Tard, and the founding team made the difficult decision to shut down its operations in the United States,” the Charlotte, North Carolina-based company said in a statement.
Food Rocket's website was up and running Thursday. By Friday, visitors were greeted with the message, "We are closed. Thanks to everyone who was with us."
“We believe that the rapid delivery industry has disrupted the retail market and changed consumer behaviors,” said Vitaly Alexandrov, CEO and founder of Food Rocket. “Unfortunately, current economic conditions reshuffled the tech market and presented significant challenges in the venture capital market. The decision to cease operations was incredibly hard, and we put in 100% up until the very last day, trying to stay afloat for our customers and team members."
Couche-Tard did not respond to a CSP Daily News request for comment.
In April, Couche-Tard became the lead investor in a round of funding for Food Rocket, a 15-minute grocery delivery service. The startup used the $25 million series A investment round to expand the service in Chicago and other cities, for hiring and to reinforce its artificial intelligence (AI)-enabled software.
Food Rocket worked with Circle K to explore ways in which the c-store chain could extend its brand experience and offerings to customers beyond its physical stores through e-commerce and delivery. It expected to benefit from Circle K’s size and scale, consumer insights, marketing expertise, procurement network and supply chain efficiencies. The startup has launched a system that enables forecasting stock levels and employee workloads in its operations.
Laval, Quebec-based Couche-Tard’s 26-country global network includes approximately 9,300 c-stores in North America, with more than 7,100 in the United States under the Circle K and Holiday Stationstores banners in 48 states, and approximately 2,100 in Canada under the Circle K, Mac’s and Couche-Tard banners. It has a worldwide total network of approximately 14,200 stores.
Ultra-fast grocery services, also known as “ghost grocers,” have had a rocky road since the pandemic began.
The on-demand platforms, offering delivery of grocery essentials in as little as 10 minutes, became popular in the early days of the pandemic and into 2021, when many shoppers were nervous to risk a quick run to the store.
Many of them raked in millions in private-equity funding, only to quickly burn through the cash and go under.
One such company, Jokr, had a $1.2 billion valuation by the end of 2021. Just a few months later, though, the e-tailer shut down its U.S. operations. Ultra-fast player Fridge No More also shuttered.
Ghost grocer Buyk filed for bankruptcy protection a year ago and offered up a fire sale of all of its assets, as well as its name and website, in October.
This story was originally published in sister publication CSP Daily News. It has been modified slightly.