The food startup backed by Shake Shack creator Danny Meyer has stalled out after just 4 months
An on-demand food delivery start-up bankrolled in part by the founder of Shake Shack has ended its New York City operations, just four months after its seed funding round.
It marks yet another on-demand food delivery start-up that is looking to a new business model.
Umi Kitchen was founded to let home chefs create small batches of their favorite recipes at home, then sell them to people in their neighborhoods. Focused around the idea of sharing home-cooked meals, the young start-up attracted famous investors including Danny Meyer, founder of Shake Shack and other popular New York restaurants, and the father of Umi Kitchen cofounder Hallie Meyer. Other investors included a Barclays banker and the co-founders of companies like Kitchensurfing, SoulCycle, Birchbox and Sweetgreen.
The platform, which hit the App Store in April and raised a small seed funding round in September told users in December that "the challenges of operating our business in NYC prompt us to end this chapter for the time being."
The company's co-founder, Khalil Tawil, declined to discuss specifics on the company's next move, saying only that Umi Kitchen is "more sure than ever that our vision of empowering the local cook will be realized," and that the next iteration of the company "will not be limited New York City."
His co-founder, Hallie Meyer, told CNBC that the pause in operations was caused by "the trickiness of making delivery economics work out for everyone involved."
Umi Kitchen is just the latest startup to face difficulties with the on-demand model. SpoonRocket said it struggled to garner interest from the venture community, while alcohol delivery start-up Thirstie shifted more toward a mail-order service to branch out beyond urban areas.
Bigger players like Instacart and Blue Apron have also reportedly had difficulty matching workers with the high pace of the industry.
"We learned an incredible amount during our NYC operations, and we're heads down building the next version of our product based on those learnings," Tawil told CNBC. "We're confident that the next version of Umi will better empower local cooks to bring home cooked meals to their communities in a really exciting way."
— Reporting by CNBC's Sandy Maltzman