Webvan, the online grocery business Louis Borders founded in 1999 in the thick of the dot-com bubble, went bankrupt only two years after it IPO’d. The company collapsed when it tried to expand outside the San Francisco Bay Area, because it had neither a sustainable business model nor much demand outside of the Valley.
Webvan’s history has lived on as a story of the dot-com disaster and as a cautionary tale to delivery startups today, but Borders wasn’t discouraged.
He’s back to give his grocery delivery service idea a “take two,” according to Re/code’s Jason Del Ray, who discovered a stealth startup called Home Delivery Service on the site of Borders’ incubator.
According to its description, HDS “offers consumers a single online store to shop for fresh foods and general merchandise from the world’s leading retail brands.” The company will have distribution centres where it will assemble multiretailer orders in returnable totes that it will send to users free, with same-day delivery.
Not only is Borders boldly going where he has gone before, but he’s entering a space that is much more crowded than it was back in 1999. FreshDirect has been gaining traction in more and more markets, Amazon has been working on Fresh for years, Google is experimenting with Shopping Express, Walmart and eBay have both tried to enter the market, and Instacart and a handful of other smaller startups are all working on the quick delivery of groceries, too. No one company has emerged as the obvious leader in the space yet.
Still, although there’s undeniably growing interest from consumers in the idea of food and other necessities delivered fast, HDS — when and if it launches — will be facing fierce competition. Perhaps it believes that its “patented, automated distribution technology” will be the secret sauce it needs to pull ahead.
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