In July, on-demand delivery startup Jinn pulled out of the five cities in which it was operating outside London. Now, just three months later, it is closing down for good, after last-minute acquisition talks fell through, report Business Insider.
To be clear, this is not news that will send shockwaves through the (relatively) buoyant food delivery sector. Jinn’s business model — a borderline-infinitely customisable ordering system that allowed customers to get delivery from pretty much anywhere they wanted — meant it was always going to struggle to achieve the economies of scale on which logistics platforms like Deliveroo thrive; this in turn meant it was always going to burn through its comparatively paltry war chest of (just!) £14.3 million at an alarming rate.
But there are still a few, uh, takeaways worth mulling over. Firstly, getting this stuff right is hard: linking drivers and restaurants and consumers feels, ahem, seamless if and when a piping hot Motu feast, for example, arrives bang on time, but there is a fearsome amount of co-ordination required behind the scenes, which — twinned with the marketing spend required to get an app on people’s phones in the first place — costs a fearsome amount of money.
Secondly — and consequently — this is a market in which it pays to be big. Jinn’s funding is (or, rather, was) peanuts in comparison with the £600 million-plus raised by Deliveroo; its eventual demise is just further evidence that this is a space in which the small player’s role is merely to be collateral damage as the big boys — Deliveroo, UberEats, maybe a relaunched Amazon Restaurants — plough relentlessly, cash-heedlessly onwards in search of the mythical monopoly status that will finally allow them to make real money out of this gig. Powers that be at smaller-scale delivery services like Quiqup might start to feel the heat soon enough, if they haven’t already.
The third and final point is more of a question: just how sustainable is the delivery market? The VCs backing startups like Deliveroo have deep pockets but not necessarily infinite patience; it remains to be seen whether Jinn’s demise is due purely to its limited scale and flawed economics, or to more systemic issues with delivery in general. After all, another question remains: Is this something that Londoners want long-term? Plenty of restaurants have gone all-in on delivery as a means of shoring up their profits in trying times; if one of the big platforms fails then Jinn’s implosion starts to look less like an isolated incident and more like a tremor presaging something fairly seismic.