# Zume (2015 – 2023)

- URL: https://girisimcikafasi.com/en/startup-graveyard/zume/
- Sector: Food and drink
- Country: United States
- Total funding: $429 million
- Cause of closure: Failed pivot

## What did it do?

Zume was founded in 2015 by Alex Garden and Julia Collins as Zume Pizza. Its original promise was pizza prepared largely by robots and baked in the vehicle on the way to the customer. It later turned to a technology platform for automated food trucks, and in 2020 to compostable food packaging and delivery logistics.

## Why did it shut down?

Baking pizza in a moving vehicle proved impractical, and customers complained about the quality of the robot-made pizzas. In 2018 the company moved away from pizza towards a bigger platform vision, and on the strength of that vision took $375 million from SoftBank. In 2020 it laid off more than 500 employees, including the entire robotics and delivery truck divisions. Its final pivot, compostable packaging, was not enough to keep the company going either, and Zume closed in June 2023.

## The story

The pizza you ordered bakes on the road as it makes its way to your door, its dough and sauce prepared by robots. That was the promise that caught the press's attention in 2016. Founded by Alex Garden and Julia Collins in 2015 as Zume Pizza, the company was one of the most ambitious of the Californian start-ups trying to put technology and food in the same box.

The early years brought investor interest. A $6 million Series A from Jerry Yang and SignalFire came in 2016, followed by a $48 million Series B in autumn 2017. On the ground, however, the reality was different: baking pizza in a moving vehicle was impractical, and customers complained about the quality of the robot-made pizzas. The idea was eventually shelved.

In 2018 the company moved away from pizza and set up the Zume, Inc. umbrella, aiming to become a platform for automated food trucks using SI and kitchen technology. The vision was big: revenue of $250 million and $1 billion was forecast for the final quarters of 2020 and 2021 respectively. In November 2018 SoftBank invested $375 million, valuing the company at $2.25 billion; in 2019 there was talk of a search for a $4 billion valuation.

The expectations were not met. In 2020 Zume laid off more than 500 employees, including the entire robotics and delivery truck divisions. During the pandemic it sold masks, then in May 2020 switched to making compostable food packaging; as CNBC put it, the robots that once made pizza were now turning waste into compostable packaging. Underpinning this transformation was Pivot Packaging, which it had acquired in 2019. However, Pivot's founders sued Zume, alleging that it had been misvalued in the $20.5 million sale, $10 million of which was paid in shares. Zume, which had raised more than $400 million, closed in June 2023.

Zume's story is a reminder that a striking technology showcase is no substitute for what customers actually expect: a good product. A big funding round pushed the company towards ever bigger visions while the core business was never proven, and each new pivot had to carry the weight of the one before.

## Lessons

- Measure the quality of the product itself, not the technology showcase; customers remember how the pizza tasted, not that a robot made it.
- If a big funding round pushes you to enlarge your vision, make sure the new vision is not being funded before the core business has been proven.
- With every pivot, rebuild your team, assets and cost structure around the new business; the weight of the old business will smother the new one.

## Sources

- [Zume](https://en.wikipedia.org/wiki/Zume)
- [Fallen Pizza Startup Zume Shuts Down After Raising Millions](https://www.bloomberg.com/news/articles/2023-06-03/fallen-pizza-startup-zume-shuts-down-after-raising-millions)
- [SoftBank's $375 Million Bet on Pizza Went Really Bad Really Fast](https://www.bloomberg.com/news/articles/2020-02-13/inside-the-firings-at-softbank-s-robot-pizza-startup)
- [This Robot-Made Pizza Is Baked in the Van on the Way to Your Door](https://fortune.com/2016/09/29/this-robot-made-pizza-is-baked-in-the-van-on-the-way-to-your-front-door/)
- [https://www.wikidata.org/wiki/Q28222782](https://www.wikidata.org/wiki/Q28222782)