When the moon hits your eye like a big pizza pie… that’s a startup? After eight years in business, robot pizza startup Zume has pepped its last ’roni and is liquidating assets. A one-time Silicon Valley darling, Zume sought to automate pizza making by having robots quickly assemble pies that were cooked in mobile kitchens en route to customers. The problem: the cheese kept sliding off the pies in transit.
All crust: Pizza tech issues led the company to park its vehicles, and then ultimately shutter its pizza biz. It pivoted to selling compostable food packaging, and then decided to shut down altogether.
Pie in the sky: Zume has become something of a mascot for the exuberant era of venture-capital investing that peaked in 2021. Despite its niche concept, Zume raised nearly half a billion dollars from investors like Softbank and once had a $2.3B valuation.
It’s a startup extinction event… Zume isn’t the only company shutting the ovens down. At least 72 startups have failed so far this year, including fintech Plastiq (which had raised $142M), biotech firm Goldfinch (which had raised $100M+ in 2020), and wine-tech upstart Underground Cellar, which was corked in April. Others are struggling to raise cash: US VC funding in the first quarter was just $37B, down from $95B in the fourth quarter of ’21.
Venturers don’t love rough country… Startups are risky, even during boom times. Now: inflation, high rates, and recession jitters have led VCs to be more scrupulous about where they put their $$. The spigot hasn’t fully turned off. It’s just become more focused — particularly on AI. Nearly a quarter of this year’s new unicorns are AI companies.