This week, Venture capital-backed meals ordering startup Yumist announced it was shutting shop with a blog post on its main page : It’s been a FABULOUS journey, but…
70% of our monthly orders were from repeat customers and from March until September we tripled our revenues and gross margins. With these trends, Yumist would have become a profitable company by June 2018.
Yet, we are shutting shop today. We failed to raise the kind of capital that this business required while staying true to the customer problem. In hindsight, there’s a bunch of internal and external factors that led us to this dead end.
From launching in a second city prematurely, or committing to a high growth, high burn model just because prospective investors wanted to see that back in 2015, or taking a tad bit too long to find the right business model, we made our mistakes. We learnt from these mistakes and recovered fast, but maybe not too fast.
Operating in the high-burn, fast-paced foodtech segment, Yumist was founded in October 2014 promising to offer “home-made” food to office goers and others in major Metros. The primary competitors for the business model include well entrinched players in the “dabba-walla” and “corporate canteens” space.
The startup had raised over $2.7 million funding in two rounds from VCs, according to VCCEdge, the data research platform. According to the blog, the company went through many business models across its supply-chain by innovating a demand prediction algorithm. The idea was to delivered orders within 15 minutes!
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