We’ve now confirmed some of what the signs were pointing to last week: B2B food delivery service Zoomer, the under-the-radar startup on which many pinned their Philly startup hopes, has shut down across at least a few of its markets as of today. In at least two markets, a company called EatStreet is taking over Zoomer’s workforce and restaurant clients.
Both drivers and restaurants were notified of the shutdown on Thursday via email, according to multiple sources in a few different markets. Though the company has shut down its normal service, special arrangements have been extended to restaurants in order to keep their delivery services operating until Sunday, Feb. 5 (that’s Super Bowl weekend, btw.), according to a Zoomer email to restaurants in Lexington, Ky.
Though it’s not clear exactly how many markets did Zoomer have a presence in, one former employee puts that number at just under two dozen.
Zoomer CEO Justin Goldman declined to comment.
There was also a brief explainer in the letter as to why the company, backed by the likes of First Round Capital and the city’s StartUp PHL seed fund, Y Combinator and Zynga cofounder Justin Waldron, is shutting down:
“Many factors contributed to this decision including local delivery competition (UberEats, GrubHub, among others), Independent Contractor competition, and balancing long-term sustainability for Zoomer in Lexington against the service Zoomer provides restaurants and diners,” reads a letter sent to restaurants in Lexington, Ky. “Zoomer is willing to assist with transitioning. We understand the inconvenience this presents you and would like to work together to minimize the negative impact of the transition to your business.”
Meanwhile, in Madison, Wis. and Newark, Del., Zoomer drivers will be switching over to Madison-based delivery service EatStreet.
“Effective immediately EatStreet will be operating Zoomer’s delivery service,” reads the email sent to drivers at these locations. “Zoomer will continue to operate as-is for all drivers and restaurants and there will be no outage in service.”
Here’s the email relayed by an anonymous Zoomer driver in Madison.
Though the language in the email seems to suggest some form of acquisition or partnership (“Zoomer and EatStreet are looking forward to continuing to work alongside everyone”), no such deal has been confirmed yet. The press team for EatStreet did not immediately respond to a request for comment, but we’ll keep trying.
Important context here is that Zoomer has raised money from a number of investors both in Philly and beyond: now that the company is shutting down, likely management is looking to reap as much of that capital back as possible.-30-