Brazil’s iFood buys up SpoonRocket technology

Online food delivery platform for Brazil sees a use for technology behind SpoonRocket

iFood, an online food delivery platform for Brazil, announced this week that it has acquired the technology behind SpoonRocket.

Terms of the deal were not disclosed.

Earlier this week, we reported on the shutdown of SpoonRocket, which had struggled to compete with the vast array of food delivery options in San Francisco. The company had said it was "contribution margin positive," meaning it was able to cover fixed costs through sales but not additional variable costs. And the cool venture capital climate ultimately prevented them from raising a new round of cash.

SpoonRocket reportedly had found a quick-service restaurant willing to acquire the startup, but the deal fell through in the final days, ultimately leading to a shutdown. Now iFood has stepped in, but the company confirmed for me that it is specifically acquiring the technology only, leaving SpoonRocket’s approximately 50 employees without a job.

That said, the SpoonRocket CTO will stay on to help integrate SpoonRocket's technology into the iFood platform.

The acquirer says it will use the new technology to improve its delivery time and continue expanding across Latin America and other markets. For now, the service is available in 100 cities across Brazil.

“As we look to expand beyond Latin America, this acquisition will further propel our leadership and affords us the opportunity to grow and take advantage of SpoonRocket’s unparalleled logistics technology,” said Felipe Fioravante, CEO and founder of iFood, in a prepared statement.

iFood has raised over $60 million across multiple funding rounds from Just Eat, Movile, and Warehouse Investimentos.

Just Eat, a publicly traded London-based company with approximately $2.5 billion in market cap, itself has been a key player in the ongoing consolidation of food tech companies. Early last month, the company dropped €125 million in cash (approximately $139.3 million) to purchase three online ordering and food delivery services cumulatively serving Spain, Italy, Brazil, and Mexico.

Movile, which has 15 offices from Silicon Valley to Argentina, describes itself as a developer of mobile content and commerce platforms for Latin America. Other apps supported by the company beyond iFood include PlayKids, Apontador, Rapiddo, Superplayer, Cheftime, Messaging, and Cinepapaya.

In 2014, Warehouse Investimentos sold its stake in iFood to Movile for an undisclosed amount. Originally, the investment firm had poured R$3.1 million (approximately $1.56 million) into iFood.

As I wrote earlier this week, all this news surrounding SpoonRocket is just more fuel to the fire that online food delivery space is a tough space to survive in, let alone succeed. And it doesn’t help that you need more than two hands to count the number of players out there.

In the past month alone, Instacart slashed earnings for its drivers (as a transparent ploy to boost revenues) and Ola Cabs in India shut down both it grocery delivery and restaurant food delivery apps. Meanwhile, Uber continues to push UberEATS in U.S. markets.