The fall out in the London on-demand delivery space looks set to continue. This time it’s the turn of Delivery Cube, the startup that enabled take-outs to outsource delivery (and competitor to Delivery Hero’s now-shuttered Valk Fleet).
The young company has told TechCrunch that it has “paused” logistics operations, including dismantling its fleet of drivers. Instead it plans to offer the Delivery Cube tech platform to other companies with a logistics component to their business.
“In early March, we made the decision to pause the logistics operations in favour of a focus on the technology platform,” says co-founder Krupa Patel, confirming the startup’s pivot in the making. “The Delivery Cube technology platform seamlessly connects any business to a remote fleet of drivers, using advanced optimisation algorithms to select the most appropriate driver”.
That change in strategy has already seen “varied interest” in the technology, ranging from traditional logistics players to companies that have historically operated with drivers allocated at individual stores rather than a mobile fleet. “The platform provides a unique opportunity to make their processes more efficient, whilst maintaining control over their fleet, an attractive proposition,” adds Patel.
However, the most interesting aspect to this story is the alleged effect Delivery Hero’s deep pocketed Valk Fleet had on Delivery Cube’s business and, crucially, the startup’s ability to raise. The fact that Valk Fleet UK has since gone into administration is an irony not lost on Patel.
“The Delivery Cube logistics operation was running smoothly and generating a gross profit in the first delivery hub, but to expand the service we needed to raise capital,” she says. “This is where we came across our biggest challenge. Investors were initially very attracted to the investment opportunity but Delivery Hero backed Valk Fleet was deemed to be too high a competitive threat and prevented investors from committing.”
In particular, Valk Fleet was expanding “incredibly aggressively” with what, says Patel, appeared to be a “deliberately loss-making and land grab” strategy. Ultimately that didn’t pan out after parent company Delivery Hero pulled the plug, but that’s likely little consolation to Delivery Cube’s founders.