Re/code reports that founder Louis Borders, who took Webvan public in 1999, is back for a second act. At the time Webvan's grocery delivery business was only operating in the Bay Area:
But less than two years later, the company shut down after it embarked on an expensive, and ultimately disastrous, expansion plan before it had sufficiently proven that demand and its model were sustainable.
Webvan went bankrupt in 2001 after placing a $1 billion order with the construction company Bechtel to build warehouses in order to expand to 26 markets in 24 months. That wasn't the only billion dollar price tag. Webvan also acquired its chief competitor, HomeGrocer.com, for $1.2 billion. Everyone got singed except its CEO, CNET reported in 2001:
The burnout was a long and drawn out one for Webvan, as the company went through several rounds of layoffs, store closures and asset sales, before filing for Chapter 11 bankruptcy protection in July. Along the way, company Chief Executive George Shaheen resigned, but not before getting a golden parachute promise of $375,000 each year for the rest of his life.
If there's one thing Silicon Valley likes, it's throwing a bunch of copycat startups in a ring to see who emerges the victor. So now Borders will be competing against Instacart and Relay Foods, as well as Fresh Direct, Peapod, Amazon Fresh, Google Shopping Express, and more.
His new company will be called Home Delivery Service or HDS. Re/code found a description of the idea on one of Borders sites:
"In HDS distribution centers, multi-retailer orders are assembled as one lot, packaged in returnable totes and delivered quickly and conveniently by HDS couriers in HDS vans."
Is there a startup that will let me deliver the definition of insanity to Borders' doorstep?
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