Recent Failures, Zume, Fuzzy, and New Age Meats
Softbank-backed Hot pizza delivery service Zume shut down in June 2023 after eight years in business. They were backed by Soft Bank, who famously backed WeWork. The startup raised a whopping $446M to disrupt the pizza industry. They were addressing the problem of lukewarm pizza delivery. Delivery trucks were equipped with robotic pizza-makers and smart ovens to cook pizzas while en route to customers. However, the startup encountered many issues, like cheese sliding off pizzas. They had a high cash burn, surpassing more than they could generate revenue. After pivoting to sustainable packaging in 2020, Zume did not raise any additional funding and eventually closed its doors.
Fuzzy, a vet care startup founded in 2016, shut down. Fuzzy had raised $80.5 million from investors, including Icon Ventures, Greycroft, Crosscut, and Matrix Partners. The company also secured investment from owners of veterinary clinic groups in the US, UK, and Germany, Mark Vadon, former Chairman of Chewy. Its most recent investment round, a $44 million Series C, occurred in 2021. Fuzzy offered a variety of features, including 24/7 live chat and telehealth for $15/month, ship-to-home prescriptions, vet-curated items in its e-commerce marketplace, educational content, nutrition, training, and obedience programs. It also offered pet insurance.
The company had a messy exit. They owed hundreds of thousands to millions to creditors, vendors, and employees.
The business model was not commercially viable and could not scale.
New Age Meats
The cultivated meat startup New Age Meats launched in 2017 but never fully got off the ground. They shut down at the end of March. The goal was to develop an alternative pork product. They raised $32M in funding across several deals. However, after they raised a Series A in 2021, they made some bad strategic decisions. The company built its own production facility despite its alternative meat product not being ready for commercial production. After closing the facility and laying off employees, the company ran low on working capital with a high burn rate, ultimately forcing it to shut down.
The company had little money, a fair amount of debt, and no new investment dollars. Most importantly, they had no immediate path to product development.