Fridge No More permanently shut down on Thursday after talks with DoorDash to buy some of its business fell through.
According to people familiar with the matter, Fridge No More was in talks with DoorDash to sell its warehouses after the startup failed to get funding. The food-delivery giant toured Fridge No More's dark stores in February, but that process ended this month, the people said, asking for anonymity because the matter isn't public.
The Chief Executive Officer told employees in a message that each order brings losses to the company.
The Fridge No More app was temporarily closed in New York.
Fridge No More was founded in Brooklyn, New York in 2020 and is one of a number of startups that have sprung up to offer consumers delivery of groceries within 15 minutes. The company raised over 15 million dollars last year.
The sector has begun to contract as investors demand profitability.
Buyk faces a funding crunch.
Representatives from Fridge No More and DoorDash didn't respond to calls requesting comment.
Fridge No More was the second such app to go dark in recent weeks, following the layoffs of employees at Buyk. Buyk can't get financing from its Russian creators. Fridge No More has ties to Russia but its problems seem to precede Russia's invasion of Ukraine and the ensuing sanctions and restrictions on the flow of funds. Fridge No More CEO Danilov is from Russia and the company's investors include a venture capital fund led by Ryabenkiy that has operations in Russia, the U.S. and Israel.
The deal with DoorDash was killed by due-diligence and the cost of assessing exposure and potential risk around the startup's ties to Russia.
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