The food delivery app market is not for the faint of heart; cash burn is severe and the competition is even more brutal. As Jinn has closed up shop, the market for apps that hire a band of cyclists to pick up food on behalf of customers has lost yet another contender.
Jinn had been working hard to find a buyer: Business Insider reports that in the past week the app’s management met with three rival food delivery businesses to discuss a potential acquisition. These talks failed despite Jinn having claimed to be profitable on the EBITDA level. A deal could have been beneficial: Jinn offered a unique service in the food delivery market as it enabled customers to place orders from any shop, not just the ones that had specifically signed up with the app. Neither of the big-name competitors – Deliveroo and Uber Eats – offer this service.
While Jinn had a cutting edge service in a precarious market, access to funding is what makes or breaks a food delivery app.
Deliveroo has raised over $800 million compared to Jinn’s $19 million, enabling the former to far outspend the latter on marketing and courier incentives.
Jinn isn’t the first food delivery app that’s shuttered after running out of money and failing to find a buyer: last year Take Eat Easy closed after it had been running for just four months. The company had been working for eight months to either raise a C round or find a buyer amongst the competitors.
Now, Jinn’s administrators are reported to be looking for a buyer for the remaining assets, namely the software platform that powers the orders and dispatch process.
It’s possible Jinn’s unique service will find its way into one of the competitors’ offerings after all, but the food delivery app sector is crying out for a more fruitful approach to M&A.