Despite taking at least two fatalities in the U.K. — both Housebites and Dinnr dead-pooled earlier this year — the cook-at-home food delivery startup idea looks like it’s here to stay.
After Shuttlecook launched in London earlier this week, the latest to throw its chef’s hat in the ring is Marley Spoon, which has expanded beyond Germany, to launch in the U.K., and the Netherlands.
The startup, co-founded by Fabian Siegel — who, notably, was co-CEO of online take-out ordering service Delivery Hero — has also scooped up €4 million (~$5 million) in fresh funding via a Series A round led by Global Founders Capital, with participation from Point Nine Capital, and various unnamed angel investors.
That’s somewhat puzzling, given that Global Founders Capital has ties with the Samwer brothers’ German startup factory, Rocket Internet, which incubated competitor HelloFresh.
In a call with Siegel, he begged to differ. “I think HelloFresh and Marley Spoon are not targeting the same customers,” he argued. “I think those are more adjacent businesses than competing businesses.”
That’s because, unlike HelloFresh, and U.K. rival Gousto, which both utilise a subscription model and ask you to commit to several recipe-kits per week and are designed to replace part of a weekly supermarket shop, Marley Spoon is an “on demand” service for those who can’t — or don’t want to — plan too far ahead.
Think families with children, versus both young couples and “empty nesters”, says Siegel. The former are much more likely to be organised but also price-sensitive, while the latter are mainly looking for inspiration.
“When I go to the supermarket, I always buy the same stuff, even though I think I’m going to let myself be inspired. This is where Marley Spoon comes in,” he explains. “We want to bring delightful market-fresh and easy cooking back to the people — so the cooking experience is our product.”
How this translates in practice is that you select from an ever-revolving menu of 7 extremely tasty-sounding dishes, and can order up to 48 hours in advance, with deliveries going out twice a week.
This is just enough lead time for Marley Spoon to manage logistics — both in terms of ordering the exact amount of fresh ingredients required for production, without the need for a warehouse or throwing food away, and ensuring it can deliver country-wide.
In fact, Siegel says that the service is proving most popular in smaller cities and rural areas, where it’s perhaps more difficult for individual customers to otherwise source the ingredients required to get creative in the kitchen.
When I ask him why Marley Spoon can thrive where similar startups have failed, in typical Rocket Internet-esque fashion Siegel says it ultimately comes down to “execution”.
“You have to be brilliant in your execution. What you need for execution is two things: Experience and money. You need money because it takes time. The problem is, nobody knows you exist and nobody knows about your concept. So the funnel is a much slower one. You also need operational excellence, because the product has to be fresh, it has to be awesome, it has to be flawless and you can’t miss anything. The ability to raise money is important — you can’t bootstrap this business.”
Returning to the topic of the cook-at-home food delivery space as a whole, he adds: “[All] of us scratch the surface of this massive grocery market, which for me is the last frontier of e-commerce. Nobody owns it yet and it’s the biggest vertical in consumer spending.”
Furthermore, Marley Spoon and its immediate competitors face the same challenge of educating consumers that they can order food over the Internet, and in doing so, will only help each other. “I think they’ll be multiple billion dollar opportunities,” says Siegel, while conceding that it’s still extremely early days for this burgeoning market.