About 18 months after debuting its home-delivery service in Denver, Favor Delivery confirmed Tuesday that is has pulled its Mile High stakes in order to focus on its Texas homeland.
“Yes, we can confirm that we are withdrawing operations in Denver effective today, January 17,” Uri Bogler, Favor’s vice president of marketing said in an e-mail. “As part of our growth strategy, we are shifting our near-term focus back on our home state of Texas, in an effort to achieve profitability and win on-demand delivery in the Lone Star State.”
The Austin-based company, which offered a personal-errand service retrieving anything from food to dry cleaning to toilet paper, entered a crowded Denver market in May 2015. At the time, there wereoffering a variety of home-delivery services. Many were expanding nationally thanks to nearly $434 million in venture capital funds in the prior year, .
Favor itself was fresh from and announced plans to expand to 10 cities.
And if you thought 2015 was a competitive market for delivery, Groupon Groupon to Go in August, while Amazon began hiring extra drivers to get packages to customers from its new Aurora sortation center.
The fuss over food delivery and the trend to deliver more than just pizza led Morgan Stanley Research to project that the U.S. food delivery market could grow to $210 billion a year, from $11 billion today, according.
“Should customers come around, a significant market awaits,” according to the Morgan Stanley report titled “The Pizza Paradigm for Online Food Delivery.”
But on Tuesday, Favor said its decision to leave has nothing to do with Denver. In June, which had been operating in 23 cities, had decided to shut down in Chicago, Philadelphia, Atlanta, Miami and Washington, D.C.
“We are withdrawing from Denver to focus our efforts on winning Texas,” Bogler said. “Our withdrawal is not a function of Denver not working out.”
The closure in Denver leaves one full-time Favor employee unemployed as well as 50 “runners” who worked under contract, Bogler said.
