The food delivery startup sector is a misleading fad. It’s not an emerging tech disruption, but rather, it’s just a trend for restaurants to call themselves by a new name. At least according to a recent Forbes article.
Considering the rush of food delivery startups launching in the US market and receiving phenomenal amounts of funding – one startup, Maple, just landed US$22 million -, Forbes’ Brian Solomon argues that food delivery startups are not real tech startups, but rather just restaurants reinventing themselves under a new image.
Solomon says despite appearances, the food delivery tech-startup sector is not getting overcrowded – it doesn’t really exist after all. It’s actually the restaurant sector, he says, which is getting busy.
“My advice […]: don’t invest in ‘food delivery startups.’ Just make your existing restaurant staff look younger, hire some data scientists, and call yourself a tech company. It’ll do wonders for your valuation,” Solomon concludes.
African markets are also seeing the beginning of a boom in food delivery startups.
For example, in Kenya at the moment first mover Yum is battling Africa Internet Group (AIG)-backed hellofood for dominance in the market.
Is this just the start of African restaurants reinventing themselves under a new name? Are these startups really leveraging tech to disrupt the sector?
I think it is disruption.
The value offering in Africa of circumventing infrastructural challenges and inconveniences – bad roads, busy roads, restaurants’ common failure to establish reliable online presences – is weighty.
As hellofood Kenya managing director (MD) Arnaud Foubert told Disrupt Africa recently: “hellofood’s service both brings consumers the convenience they need and helps them save their precious time.”
“Traffic congestion may be seen as [an obstacle to food delivery startups], but it actually reinforces the interest of our service, which allows people to avoid the hassle of wasting time in traffic,” Foubert said.
With Africans notoriously tech-forward in adopting new mobile solutions, the convenience value of food delivery startups which also tap into the mobile market could shake-up the food hospitality market across Africa.