News

Delivery startups targeting fast food crowd

October 27, 2014

The quick-service marketplace continues to get more crowded. A growing number of online food companies are popping up, particularly in the San Francisco area, and they’re calling themselves a "healthy replacement for fast food."

Bloomberg Businessweek featured some of these companies recently, including Sprig Inc., Munchery Inc. and SpoonRocket Inc. The company describes the ease of service – ordering from a smartphone app and receiving the order within 20 minutes.

Bloomberg says these food companies are "doing more than facilitating takeout orders."

"These restaurants in the cloud operate their own kitchens and employ professional cooks to make meals that customers order via mobile apps. The startups trumpet delivery times of 30 minutes or less," the story said.

The businesses price points compete with both the QSR and fast casual loyalists – lunch entrees from Sprig cost about $9, and dinners are about $10.

Gagan Biyani, co-founder of Sprig, said his company is a "healthy replacement for fast food."

SpoonRocket targets the University of California at Berkley crowd. Its founder and CEO calls the company "fast food 2.0."

CB Insights data shows that investments in these types of startups, which also include GrubHub and Seamless, are at their highest point since 2009. Pravin Vazirani, a Munchery investor, said, "Most people don’t want takeout food or restaurant food several days a week, so we were attracted to solving the current customer dissatisfaction."