Which Operators Are Celebrating 4/20 A Day Early?
Grubhub + Mercato, Ibotta & Serve Robotics go public
Before you exhale for the weekend, we’ve got a whole lot of cannabis-infused delivery news. Plus, Grubhub’s finally getting into the grocery game, and we’ve got two very different IPOs to look at. Keep scrolling!
Today:
MJ-Themed Collabs Light Up Marketplaces
Grubhub Gets Groceries with Mercato
Chart Time | Who Bought Ibotta? (A Lotta…)
Serve Robotics Wheels Its Way to Nasdaq
PROMOS | Brands Pin High Hopes on 4/20
Keep those lighters at bay for another 24 hours… we’re still a day away from 4/20, the world’s favorite weed holiday. Nevertheless, a number of brands have started celebrating early. Cantrip, a THC-infused beverage, just rolled up onto the DoorDash Dash Mart marketplace, joining a segment that’s starting to get pretty crowded. Seth Rogen is weedling his way into the rotation as well, as his “cannabis & lifestyle brand” Houseplant is lighting up Gopuff. (Sadly they don’t sell actual houseplants, but you will be able to get an astray in about the same amount of time it takes to clear the bong…) Brands are getting sticky icky with it IRL as well, as KFC is launching its “Saucy Nuggets Dispensary” in Los Angeles. Located on Abbot Kinney (Fairfax would have been a better fit,) the store will sell dips, not dabs.
The Big Picture: As Axios notes, getting “Cali Sober” is hot, hot, hot. And yet none of the 3PDs have dipped a toe into actual marijuana delivery, instead leaving that to specialty purveyors like Eaze and Emjay. Besides the brand safety concerns, there are also operational and regulatory reasons for staying out of the space: strict record keeping / track and trace requirements, difficulties with credit card acceptance, and the need to use employees instead of independent contractors.
3PD | Grubhub Enters Grocery Game with Mercato Partnership
Finally, you can buy some oranges on the orange colored app! Grubhub is getting into the grocery game, thanks to a new partnership with Mercato, an online marketplace for indy grocery stores. Mercato has over 950 merchants across 320 cities, including major markets like LA, NYC, Chicago, Philly and Boston. Grocery operators will continue to use their Mercato software, which will now route in orders from Grubhub, alongside its existing transactions.
The Big Picture: While UE and DD have gone head to head in IC in the race to onboard mega grocers, Grubhub has stayed pretty firmly in the restaurant space, although you can get some limited SKUs from partners like Gopuff or CVS. While this new partnership doesn’t bring in the likes of Kroger or Albertsons, it does add some beloved local brands with less price conscious shoppers: Eataly, Boston Public Market, LA’s Original Farmers Market, Grace’s Marketplace, etc. Given Wednesday’s news that Gopuff was teaming up with Misfits Market, it looks like the grocery wars are getting hot again.
CHART TIME | Ibotta Surges On IPO
We’re so back, baby… Ibotta IPOed on Thursday, soaring 33% on its debut. The company moved its opening price up to $88 per share, above earlier estimates of $76-84 — allowing the Walmart-backed company to raise $577.3 million — before closing the day just about $103. It’s holding pretty steady on day two, flirting with the $100 line. Ibotta powers cash back on groceries and other retailers; this strong showing will likely pump some new energy into the retail-tech and payments category.
AUTONOMY | Serve Robotics Is First PDD to Go Public
Serve Robotics, the sidewalk delivery bot startup backed by Nvidia and Uber, also had a stock market debut, as it hit the Nasdaq via a reverse merger than raised about $40 million. Shares started trading at $4 a pop, but have currently slid to around $2.62. While the company only brought in $207,545 in revenue last year, its optimistic that increased on-bot advertising (with partners like Nickelytics) will meaningfully increase sales.
The Big Picture: Serve has been stuck at about 300 LA-based bots for some time now, as cash constraints have kept it from building out its fleet; an earlier attempt to raise money via crowdfunding didn’t really take. The company now hopes it can hit 2,000 robots, which it wants to take to San Diego, Dallas and Vancouver. While it now has the cash to get back to building, we’ve seen time and time before how quickly these small-cap startups can burn through their money once you add in all the underwriting / offering expenses and the additional compliance costs associated with being public. Slapping ads on a novel public object is no panacea either, as we’ve seen the same model struggle to fund bikeshare a decade ago, and micromobility more recently.
A Few Good Links
Ikea opens a foodhall in SF. Speedy Eats builds autonomous drive-thrus. Amazon built a secret retail brand so it could list on Walmart, eBay. Ghost kitchens are disappearing. Jose Andres Group’s CTO joins OpenTable advisory board. Six Waymos block traffic in SF. Senators question 3PDs over hidden fees. GM rolls out tool to transfer energy between cars, homes. White Castle celebrates 20th anniversary of Harold and Kumar. EV Realty secures electricity before acquiring land. Amazon pushes back on Just Walk Out news. Uber Eats picks Forage for SNAP processing. Paccar opposes new enviro reporting. Ford, Honda and GM team up on Scope 3 emissions reporting.
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