SoftBank-backed pizza startup shuts down after raising $445M | Hacker News Reader

SoftBank-backed pizza startup shuts down after raising $445M

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71 pointsilamont80 comments

The linked Bloomberg article[0] had this info I found quite funny:

> Last June, Zume bought a company called Pivot Packaging to jump-start its ability to sell compostable containers to other businesses. It held a one-day test at a Pizza Hut in Phoenix in October, with the goal of expanding the tests to more locations in January or February of this year. But the boxes can’t legally hold food in some jurisdictions, including San Francisco, because they contain the chemicals known as PFAS

So.. compostable forever chemicals, how does that work?

[0] https://www.bloomberg.com/news/articles/2020-02-13/inside-th...

Aren't pizza boxes already compostable? What was going on? I would have loved to seen the investor pitches and board meetings.

On their own they are compostable, but after usage they are drenched in oil and other stuff, which makes it impossible to recycle them, and harder to compost in a regular unprepared setting. So maybe their aim was to make them compostable for any private customer or unprepared garbage companies?

You can generally compost food-soiled paper products, though I expect the cardboard used in pizza boxes wouldn't break down easily in a home or vermiculture composter. Commercial or municipal compost service providers should be able to handle a pizza box just fine. E.g., the Seattle municipal compost program lists pizza boxes as one of the top 5 things you should be putting in your compost bin: https://www.seattle.gov/utilities/your-services/collection-a...

oh, come on, a bit of oil is perfectly fine in the garbage/compost, a few moments ago (figuratively speaking) it was still a sunflower-seed or an olive, both of which are fine to throw into the compost and degrade fine on their own if they fall onto the groud.

Because olive or sunflower oil are the only oils that get onto a pizzabox? Said noone who has ever actually seen a pizza.

Wait is this really an issue? It’s not like it’s some petroleum product, it’s always some kind of vegetable oil, right?

Animal fats also compost reasonably fine. I think most come from cheese that is milk fats or from meats. But none of those should be any issue either.

Reasonably fine for large scale/municipal composting. Last time I checked there was a lack of strong consensus on whether animal fat always composts well in someone's backyard composter, so YMMV. But the reply was really poking fun at the idea that pizza fat (outside of strict vegan pizza I guess) is exclusively plant based.

It is when you order one with cheese. Or with pepperoni. Bacon. Sausage. Etc. Etc.

It is no longer the case that pizza boxes are not recyclable. Paper Mills all over the country have no problem recycling them even with grease and cheese on them. Some localities haven't updated their guidelines so please check yours and let people know.

https://www.afandpa.org/news/2021/lets-set-record-straight-p... https://www.sierraclub.org/sierra/yes-you-can-recycle-your-p...

Source on pizza oil making cardboard uncompostable?

I have just Googled "PFAS compostable" and unfortunately it does not seem uncommon... For instance [1] (from the UK):

"Surprisingly, the highest levels of PFAS (by an order of magnitude!) were consistently reported in moulded fibre compostable, ‘eco-friendly’ takeaway containers; the type we’re told are sustainable alternatives to plastic."

Also, I thought pizza boxes were just cardboard, especially since they are single use and for a short time, only.

[1] https://www.fidra.org.uk/chemicals-pollution/pfas-in-compost...

How bizarre. Great link, as it also goes into the lack of centres to actually carry out composting in the UK (at scale).

However it doesn't go into _why_ there are PFAS in 'compostable' materials. At a wild guess, they are too fragile without them?

This is only a guess, but... perhaps waterproofing? Did they replace plastic coatings with PFAS?

Hmm, I'm not certain, but it seems that fluorine applied to plastic coatings can make them better against oxygen and moisture and probably oils. This process then forms PFAS.

PFAS is used in the inside coating on "compostable" cardboard takeout boxes. Its also used in those compostable paper straws. The coating is to prevent moisture from damaging the container. I have no idea why someone would put it in pizza boxes.

I honestly think we should rethink some of these compostable things, PLA would work better for straws and packaging for cold food and beverages, and there have been wax coated cardboard containers for both hot and cold food for a while.

Hm. How bad are PFAS? Were those problems known to people in the PFAS-Industry?

Why are they even adding PFAS to pizza boxes?

Makes it grease and water proof... Paper is not really that great option without those.

A half a billion dollars...for a pizza place, robots or not. I should have some profound comment to make here, but this has reached a scale where my meager human mind cannot keep up, similar to a journey to Pluto or summat. It's almost as if SoftBank is just here for our entertainment, and the end game is...hell if I know, but I am entertained.

Dominos is one of the 10 biggest restaurant chains on the planet and their market cap is only $10.6b. Anyone who thought to value this startup at over 20% of that does seem comically and entertainingly incompetent.

SoftBank is starting to seem like the Jim Cramer of SV funds

It seems the business model is to throw enough cash at the problem and you'll get a profitable business.

Pizza was supposed to be their beachhead, and they were going to expand to other just-in-time food delivery.

I was also skeptical of this particular venture, but keep in mind that Domino's has a market cap of over $10B. There's a lot of money in ubiquitous things like pizza or laundry detergent. The execution here sounds poor, but the concept of "use technology to revolutionize <common everyday thing that lots of people spend money on>" is not lunacy. Just hard.

To make it even funnier, just remind yourself that Softbank raised all this money to accelerate the development of the singularity, which will happen just 15 years from now (according to softbank). Just imagine the chain of thinking that links that to pizza.

The Silicon Valley TV show had a pizza startup that met a similar demise [0], bringing the show closer to documentary than fiction!

[0] https://www.youtube.com/watch?v=LYu-d6y5HRo

That show is a documentary

They were so accurate about many things… Including our beloved ChatGPT.

A couple years ago, I was interviewing for my first job at a startup. The company was very small at the time (~75 employees), and my interview loop included the CEO.

When he gave me a chance to ask him questions, I asked if he watched the show Silicon Valley, and asked how real the show is.

He laughed, and said yes, he loved the show, and that it's surprisingly realistic. There are things that they exaggerate for comedic effect, obviously, but generally the show isn't too far off from reality.

If any VC firms want to hire me to vet investment ideas I'm available. "No, do not give the pizza startup $445 million." Simple.

I do DD for a living. It's rarely that simple. But SoftBank is a special case.

How did you get into the field?

I've been a small time investor for decades and would usually be the one to handle hard tech issues at the start-ups I invested in if they ran into some kind of wall (scaling, hard to find bugs). Someone (another investor) noticed that and tipped off a friend who worked for a really large fund, they hired me to do a DD job on a company in Germany and that got me my launching customer. Syndicated deals grow the network and bit by bit it became a pretty serious player. Now doing anywhere from 20 to 45 jobs per year depending on the economy.

If any VC firms want to hire me, I'll definitely take $445 million to make an automated gourmet Mac'n'cheese startup. I promise it'll take over the world, especially if I can give myself a multimillion salary.

I'll do it for only 10% of the investment.

"Instead of giving them $445M, give me $44M and then don't do the pizza thing. You'll save $400M. You can't afford not to give me this money."

I was wondering why Youtube pushed a Zume pizza video to me the other day. It probably got popular due to the bankruptcy (https://www.youtube.com/watch?v=TkhWonFm-Lw).

As cool as the concept looked I wasn't sure how viable it would be to try to mass deliver all those pizzas. I imagine the bottle neck is # of delivery drivers during peak hours...and you simply would want more drivers, not 1 person delivering 50 pizzas. I guess I found my answer.

Dominos did partner with General Motors for a fleet of Bolt EVs for their delivery vehicles. It would be cool if Dominos built into the hatchback warmer ovens. Now that would be a more viable business model than a UPS truck size driving around.

is the co-founder/-ceo actually buying the shit, that she regurgitates? how is this a real person?

So many cool technologies in that cringey video, but none of them add up to a whole new pizza delivery brand.

For comparison, a How It’s Made of industrial scale frozen pizzas https://m.youtube.com/watch?v=EW6UCWDQfj0

So they still have humans loading up the dough flattener, applying cheese and toppings, taking the pizza out of the oven, putting it in the automatic cutter, and then handling the pizza until it gets to your door? Other than the dough flattener, I don't really see this as a major improvement. Applying sauce takes about two seconds and can be done by the toppings guy. Automatic cutters already exist but are a little faster and more consistent than a human. Getting a dried out pizza that has been driven all over town doesn't seem that appetizing either. I worked in a Sbarro's location in college and we did the same thing with pizzas before the lunch/dinner rush and it just dried them out. Being in a box doesn't help much either but I'd rather have more direct deliveries than my food sitting in a warmer for who knows how long. Paying half a billion for a sauce machine, robot arm for loading the oven, and what is essentially a food truck with a big oven has got to be the biggest waste of money. This has to be some form of money laundering.

If this really was such an obvious innovation, why haven't any of the big chains done the same? The fast food industry is always trying new ideas to help speed up food and make it more consistent so I don't see them missing the idea of something like using a robot arm.

A pizza food truck is probably one of the best ways to enjoy a pizza, outside of an actual restaurant, if you want fresh without the degradation during the trip.

https://www.youtube.com/watch?v=CvCZFsyFTV4

Seems like reasonable solution. And even there I hate the dough prep step... But I think in one other video that was automated. So I suppose you could throw in boxing robot at the end and get pretty decent full solution already.

Robot pizza chefs, food delivery and office rentals.

Mayasoshi San may be history's first de-industrialist.

One thing's for sure: this is a much worse business case at 5% interest than at 0% interest.

Borrowing money at 5% for an expensive machine that can be replaced by paying monthly salaries for labor is not a great business proposition. But it may be at 0% interest.

Investors must be pretty cheesed off that they couldn't deliver. Everyone wanted a slice of the low-rate environment pie, but now it's cooled down and doesn't taste so good anymore. But maybe some hungry folks will buy the dip. Pepperoni.

Slice of pizza.

Ah SoftBank, please never change.

Discussed previously: https://news.ycombinator.com/item?id=36177048

If Blaze Pizza couldn’t beat Dominos in flavor and texture when I’m right there picking all the ingredients and eating the pizza fresh out the oven, then Zume had no chance.

The fundamental issue is that these pizzas are made expediently. There are compromises made in pursuit of automation and speed that make the pizza worse than Dominos/Pizza Hut/Papa John’s. Those aren’t paragons of pizza-making by any stretch, but they’re the competition.

Theoretically you can create a machine that puts out a pizza that rivals the best pies in Brooklyn or New Haven, every single time, but I guess investors thought that the plebs will eat fancy DiGiorno’s at Domino’s prices and not notice the difference.

Maybe one of the major pizza chains will buy Zume’s IP and iterate from there. I don’t think they’d deploy the technology until it reaches human-equivalence for at least some of their pizzas or part of the pizza-making process. Pizza chains can play the long game. A pizza robot startup valued at $500M can’t.

I think it’s really unlikely that anyone will buy the IP because Zume wasn’t a serious robotics company, it was a vibe/feeling/vapourware thing. My understanding is they never reached the point where they could automatically place most toppings. They were becoming less robotic as they attempted to expand.

Interesting that topping placement was their barrier to full automation. You’d think dropping stuff on a bounded circle is a solved problem for robots.

> The company had raised $445 million in venture capital funding, including $375 million from SoftBank in 2018 at a $2.25 billion valuation.

> [...] lay off over half its employees and attempt a very hard pivot from robotic pizza delivery to sustainable packaging.

Evaluations apparently mean nothing anymore?

VC start-ups where never about the start-up or the product. They are designed to shut down after few years of rising capital to pay the execs ridiculous amount of money. Is about funnelling those funds to salary and bonuses before it runs dry. Rinse and repeat.

They didn't actually receive $445m in cash money though, surely? It must have been contingent on them having a working product, IT MUST????

"Having a working product" is often "too late to invest" in startups. It's just part of the culture. If you want to invest in somewhere that actually makes pizzas, you can buy an Italian restaurant in any city in the country.

https://www.forbes.com/sites/jackkelly/2022/12/05/early-vent... : in some sense, the real product, the hugely profitable one, was "the idea of a pizza company".

Or, if we look closer, the idea of a packaging company. They did indeed raise over $400m actual cash. https://www.crunchbase.com/organization/zume-inc/company_fin...

Fascinating, I actually know the CEO, I used to consider him a friend back in the day but he got a little bit of ego over the years. I'm sure he made out like a fucking bandit from this.

Still it hurts to have your company go down and his net worth just took a massive plunge.

For this to make sense it would have to be that labour would be one important factor in the cost of pizza

And that somehow making 10 pizzas instead of one would mean people would consume 10x more pizza

Surprisingly (not) this does not seems to be the case

Zume: Pizza for sure

Seems like pizza making robots would be a success. Just the right amount of sauce. Just the right amount of cheese. Toppings spread evenly out. Oven sensors to get a consistent cooking time.

Costco actually uses some tools to help with this and I think their pizza is pretty solid.

I feel like the limiting factor on pizza production is not labor speed, but oven capacity.

I really enjoyed Zume Pizza as a product. They sometimes could get a pizza to my door within 10 minutes of me ordering.

Solid PaaP metrics.

Does anyone have a more detailed explanation as to what this company was doing, and how much they actually spent?

https://en.wikipedia.org/wiki/Zume

I think they didn't really know what they were doing but must have been very good at pitching VCs.

Like an Adam Neumann of pizza?

I wonder if a pizza chain will pick up the carcass of this startup to use as a base for a robotic pizza maker.

I wonder if softbank realizes that frozen pizza is already cranked out in automated factories.

This has to be fraud. I can't see any other possibility. VC's aren't stupid.

What did people expect?

Pizza, presumably

1. Scale like hell 2. ??? 3. Profit

But step 1 is exactly the problem. I assume whatever production line makes my frozen pizzas looks pretty much like Zume's robotic pizza assembly line - except for the part where those are frozen and can be shipped from a single factory to a whole country.

Zume reinvents the whole process, but instead of freezing it they put it in a delivery truck and heat it up on the last mile. Which means the factory has to be close to your delivery area. Now, factoring in competition from all other pizza delivery services, how much scale can you achieve with that? How long until automation of these small-scale runs pays off? And how many sufficiently big cities are there to expand to?

$445 million for a pizza truck

Masayoshi Son is like Marissa Mayer on a speedball

Just think, they could’ve spent it on pizza cake.

Just think they could’ve spent it on pizza cake.

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