Kitchit

What did it do?

Kitchit was a service that sent a professional chef to customers' homes, where the meal was prepared and served in the customer's own kitchen and the clean-up was taken care of too. It began as a chef marketplace offering bespoke menus for dinner parties, then shifted its emphasis to Kitchit Tonight, a model with standard menus that could be ordered the same day.

Why did it shut down?

In December 2014 the company raised $7.5 million in a round led by Javelin Venture Partners, bringing its total funding to $8.1 million. Because a bespoke chef service was expensive and used infrequently, the team tried to build a product people would choose more often, with standard menus starting at $39 per person. In the early months of 2016, as food start-ups such as SpoonRocket, Dinner Lab and Kitchensurfing closed, big players such as Instacart and Munchery also restructured their models. In their closure statement on 28 April 2016, the founders wrote that their key metrics were strong, but that their scale was not enough to weather the surrounding turmoil and that the market was not ready to support a venture-scale business.

The story

Kitchit was founded in San Francisco in 2011 by Brendan Marshall and Ian Ferguson. The original idea was to connect people who wanted to host a private party or dinner with independent chefs. The chef came to the customer's home, prepared the menu in their kitchen, served it and then took care of the clean-up too. Over time the service expanded to Chicago, Los Angeles and New York.

Bespoke menus were priced at between $50 and $75 per person, and most orders came from small groups, mostly dinners for two. Looking for a product that would be used more often, the team launched a standard menu in San Francisco under the name Kitchit Tonight, which could be ordered the same day and started at $39 per person. In December 2014 a $7.5 million Series A led by Javelin Venture Partners, with 500 Startups also taking part, brought total capital to $8.1 million.

The company served meals to more than 100,000 people and reached a net promoter score as high as 87. But early 2016 was a tough time for food tech. As start-ups such as SpoonRocket, Dinner Lab and Kitchensurfing closed, Instacart and Munchery restructured their models. When rumours of a closure spread in April 2016, the company's management said no decision had been made and the search for funding was continuing; a few days later, on 28 April, the founders announced that the company had closed.

In their statement the founders wrote that investment runway is finite and that theirs had run out during the most turbulent period in the sector. Kitchit's story shows how quickly a service that customers love, but that is expensive and used infrequently, becomes defenceless when capital dries up.

Lessons for founders

• A high satisfaction score does not bring scale on its own; track how often the service is bought again from day one.
• In labour-intensive, on-site services, every new city starts costs from scratch; do not expand before unit economics work in one city.
• When closures start piling up in your sector, investor appetite dries up fast; calculate your runway on the worst-case funding scenario.

Sources

1. On-demand private chef startup Kitchit shuts down (TechCrunch, 2016-04-28)
2. Too Many Cooks? In Crowded Market, Catering Startup Kitchit Calls It Quits (SFist, 2016-04-22)
3. Kitchit Gets $7.5 Million To Bring The Restaurant Experience To Your Home (TechCrunch, 2014-12-09)

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