Back in the 20th century--OK, it was actually in 1999 during the dot-com boom--Louis Borders founded an online grocery business known as Webvan that has lived on only in infamy.
Webvan got big, real big. Within two years, it had spent more than $1 billion (mainly by rapidly expanding into other cities and building warehouses), gone public, and then filed for bankruptcy.
Webvan's rise and fall was so epic that CNET put it at the top of their list of the greatest dot-com disasters. Furthermore, as Fortune puts it, "That company's failure was so horrific, and the losses so great, that for years nobody wanted to go near such a business."
Peter Relan, founding head of technology at Webvan from 1998 to 2000, explained on TechCrunch in 2013 that the company failed for a number reasons: it didn't have a target audience, it had a complex infrastructure model, and it raised too much money too quickly.
The current home delivery systems have taken those lessons from Webvan and are creating a successful food delivery network that is steadily growing. Take Instacart, for example. This is a company that doesn't need to construct warehouses because it relies on the existing infrastructure of grocery stores.
Today, online food ordering is a $70 billion industry that is expected to expand at an annual compound growth rate of 3.22 percent from 2014 to 2019. No wonder companies such as Amazon, and even Webvan founder Louis Borders, want a piece of the pie.
With that in mind, here's a closer look at six of the largest players in the food delivery network to prove just how big this industry has become.
Google Shopping Express
Unlike many other online food delivery networks, Google has been at this for quite some time. It all started when Froggle was launched in December 2002. Unlike the competing price comparison services, Froggle used Google's Web crawler to index product data from vendors' websites. Over the years, Froggle became Google Product Search and then Google Shopping. In 2012, Google Shopping was re-branded into a "pay-to-play" model, where merchants would pay Google to list their products.
In 2014, Google Express launched as a direct competitor to Amazon Prime. Members pay $10 a month, or $95 a year, for unlimited same-day or overnight delivery on orders over $15. If you're not a member, you'll be charged $4.99 an order. Thus far, the service has teamed up with chains such as Costco and regional grocery stores, such as Nob Hill Foods in Northern California, for same-day delivery of your groceries.
Launched on February 1, 2014, GrubMarket was able to attract and secure over 140 vendors in order to open up online stores in and around San Francisco, Los Angeles, San Diego, and Boston within three months. Even more astounding was the fact that GrubMarket's gross merchandise volume experienced a 600 percent monthly increase in the first half of 2014. Recently, GrubMarket secured another round of funding in the amount of $2.1 billion.
With more people becoming conscious of where their food comes from, it's no surprise that GrubMarket's ability to connect "consumers with locally sourced and organic food from nearby farms and producers," as TechCrunch puts it, has made it the fastest-growing online marketplace for local foods in California.
In 2008, Leah Busque founded RunMyErrand after she realized she was out of dog food and dreamed of a world in which neighbors helped neighbors. The result? An online marketplace where users could name their price for a task and submit the offer to a network of approved contractors. By 2010, the company was renamed TaskRabbit and had relocated from Boston to San Francisco.
Despite securing $40 million in venture funding, growing to 1.25 million users, and having 25,000 people performing tasks (a.k.a. Taskers), tasks began to decline in 2014. As a result, TaskRabbit replaced the old auction-style website and began to focus on more effectively matching people with Taskers for popular tasks like grocery shopping. For each transaction, the company takes a 20 percent cut.
Yelp, one of the biggest local business listing directories in the U.S., recently acquired Eat24 in a deal valued at $134 million. Currently, Eat24 has 20,000 restaurants that work with the site to allow users to order from their local favorites. With Yelp, the plan is to expand to 1 million restaurants--which should be welcome news for Yelp users and anyone wanting to order food online or discover new restaurants.
Yelp co-founder and chief executive officer Jeremy Stoppelman stated (via Benzinga), "As more food-ordering transactions move online, further integrating Eat24 will enhance our user experience with an easy-to-use product and service that allows our large consumer audience to transact directly with businesses."
Founded in 2004, Delivery.com allows users to order online from their favorite restaurants, grocery stores, spirit shops, and dry cleaners. The easy-to-use site asks visitors to enter their addresses to receive a list of businesses that deliver to their neighborhoods. What's really unique about Delivery.com is that users can create profiles where they store their address, credit card information, and favorite foods. Users can also earn points every time they place an order, which can be redeemed for gift cards or prizes.
CEO Jed Kleckner recently informed TheStreet that the company is planning to expand outside of cities and college towns and into the suburbs.
Of course, we couldn't leave GrubHub off this list. Founded in 2004 by Chicago-based software engineers Matt Maloney and Mike Evans, the company now works with over 30,000 restaurants in more than 800 cities. GrubHub also went public in 2014, and, like Delivery.com, is looking to make its presence known in suburbs.
Besides offering users the ability to view business hours, browse menus, and compare restaurants, GrubHub allows them to store their favorite menus, record past orders, use coupons, write reviews, and even leave notes for the individual delivering their orders, such as how to gain entrance into their buildings.
Whether it's GrubMarket, Google Shopping, TaskRabbit, Eat24, Delivery.com, or any other food delivery company, GrubHub CEO Matt Maloney states there is a "tremendous opportunity in front of us."