Financing issue: Takeaway website SpoonRocket closes business
The on-demand service economy is struggling for survival. The financing issue, lower profit and strict inspection make the business hard. Some startups end business under this circumstance, including SpoonRocket.
SpoonRocket announced to close business on Tuesday. This startup was unable to get financing. It was reported that SpoonRocket was looking for final buyer in the previous week.
According to the confirmed source, Spring has been keeping an eye on the development of SpoonRocket and decides to acquire this startup company. However, the intellectual proporty and firm assets are unable to sell now. In addition, SpoonRocket has no right to sell its delivery service as its drivers are independent contract workers.
Due the end of SpoonRocket business, Spring wished to carry out the cooperation and funding transfer transaction with this startup company. It seems more like a strategy policy in order to attract the existing SpoonRocket clients. A memo sent to SpoonRocket drivers indicated them to join Spring.
The spokesman of Spring did not confirm the details of acquisition of SpoonRocket yet and he did not make any comment on the reports.
Sprig's spokeswoman cliamed that we wished to cooperate wtih SpoonRocket and invited its staffs and drivers for interview to join Sprig. Our service is highly on-demand and employees are the key to complete our mission. We deliver thousands of takeaway orders each day in our headquarter city.
The on-demand service gets into trouble now. In fact, the on-demand parking applications Valet and Zirx withdrew from the market overnight. And their rival Luxe starts adjusting its business now.
Many of companies join the on-demand service in catering industry. However, there are more and more startups announced to withdraw from this market or have been corrupted.
Ola ended its takeaway business, while Good Eggs closed down this business in some of cities.
SpoonRocket financed $13.5 million from Foundation Capital, Base Ventures, FundersClud, General Catalyst Partners and Y Combinator. Those investors initially considered the takeaway industry has promising prospect.
SpoonRocket co-founder Steven Hsiao claimed that the startup met intense competition and has difficulties to get finance. Therefore, the business is shut down. He said:" We have tried all strategies to save our career, unfortunately, those strategies turned out failed."