Take Eat Easy is a Brussels-based food-delivery startup. I can say for sure that I was surprised when I read that Take Eat Easy was being shut down. Especially since I met one of the co-founders earlier this year, and everyone was congratulating them on how well they were doing, I was also pretty impressed. What they created is not easy.
But one question remained how do they face the concurrence? Although there are many concurrent, the one I was thinking about is Deliveroo. When I asked this to the co-founder, he told me that even though Deliveroo has a greater marketing budget, Take Eat Easy was still doing better. Deliveroo is not the only concurrent, UberEats has just started in Paris and is coming to Brussels.
So you understand how surprised I was when this week I read the news and discovered they were shutting down. They celebrated their 1 millionth order last week, yet they are filing for judicial restructuring.
Now, what happened? Adrien Roose published a post on Medium where he says that they are filing for judicial restructuring for two reasons, the first one is that their revenue is not enough to cover their cost yet and the second is that they haven’t been able to raise a third round of funding.
Their income is insufficient to cover their cost
What you should understand is that Take Eat Easy has a very low margin, their revenue is 25%-30% commission they charge the restaurant and 2.50€ they charge the client as delivery fee. It may seem like a lot, but they have a to pay the courier about 10€ an hour which means that to be profitable the courier must do at least two delivery an hour.
We can see in the graphic below that they reached a rate of 1.9 deliveries an hour.
They managed to optimize their courier utilization, but it still wasn’t enough to be profitable. They needed more time to optimize and scale the company to a profitable one, as Adrien says “Courier utilization is one of the most important metrics in our business.” The courier is the variable that makes them either a profitable company or an unprofitable one. They were on the way of being profitable, but they didn’t have enough funds to continue.
They failed to raise more funds
Unfortunately, they couldn’t find anyone with the funds to make this business successful. Why? Because of competition, they weren’t able to find someone who’s willing to invest in their company certainly because investors feared the concurrence or some of them have already invested in another food delivery service and were not going to invest in Take Eat Easy. While Take Eat Easy was struggling, Deliveroo had just raised 70$ million; that didn’t help Take Eat Easy. Once you’re not profitable, the company can’t run anymore, the fuel of a business is money; this is why they had to shut down.