By Ben Sun, originally published on March 23, 2015 on Ben’s blog, Ah-ha 2.0
Last week, Maple, which we seed-funded last year, announced a $22 million Series A. Since Maple has not publicly launched yet, there were a lot of questions on why the round was so large — without even a single paying customer. So we wanted to share some thoughts on why we think that Maple is in a very unique situation.
The opportunity. First, online food delivery is a massive market. In NYC alone, Seamless/Grubhub is approaching $1 billion in annual transaction value of food orders. Second, the opportunity to provide a new and compelling food delivery option is better than ever. Restaurants in New York City are made up of small independent business owners for whom delivery is usually just an afterthought. As a son of immigrant parents who owned a number of Chinese food restaurants in Manhattan, I grew up in the business, and I saw this first hand. Restaurant owners rarely have a real discipline or strategy for offering food that would deliver well. They also don’t typically spend much investment on sourcing/utilizing packaging that really preserves the quality of the meal, and the actual delivery resources are never fully-optimized for speed and keeping the customer informed. These restaurant owners are already overworked just managing their in-house dining experience, so trying to figure out how to optimize delivery just never makes it to the forefront. On top of that, Seamless/Grubhub now charges restaurant owners 10 – 15% for processing these orders, which makes it even that much harder for restaurants to invest in improving that experience. Meanwhile, “on demand” services are becoming huge, with consumers getting more and more accustomed to high-quality on-demand and delivery services for food, groceries, housework, you name it. As they get hip to what’s possible and the services themselves are becoming higher quality, it’s time for food delivery to catch up. Maple is trying to solve this huge problem that affects a lot of people daily, which makes it an exciting opportunity and one that we know that consumers are hungering for!
The Team. Maple co-founders Caleb Merkl and Akshay Navle are exceptional entrepreneurs — and this is ultimately what drove the deal. As investors, it’s rare to find the opportunity to work with a great team that you have full faith in — so when you do, you go all in. This may result in decisions that others see as aggressive or illogical, but are actually some of the smartest and easiest decisions to make. The more you know Caleb and Akshay, the more you will understand. We got to see both of these fine entrepreneurs up close and in action when Caleb and Akshay were at Primary (then High Peaks) as an entrepreneur-in-residence and a venture partner. Through that experience and ever since, they continue to show that they are analytically sharp, hard-working, and they know how to take the long view and ‘see around the corners.’ They are impressive and inspiring and will no doubt be successful.
The investors. We know why investing in Maple makes sense for the investors. But there’s the other point of view to consider too — why did Maple partner with these investors? In our eyes, there’s plenty of good reason. This Series A round was led by Greenoaks Capital Management, which is run by Neil Mehta and Benny Peretz. Neil and I are both board members (and we were early investors) for Coupang, a multi-billion dollar ecommerce startup in Korea. I have had the pleasure of working extensively with Neil, who has been one of the most helpful investors I have ever worked with. He is thoughtful, diligent and a great collaborator who truly helps the entrepreneur. Neil’s interest in leading this round was not only about it being a great business opportunity but more importantly what he saw in Maple co-founders, Caleb and Akshay — and I believe they recognized the same potential in working with him.
Congrats to Maple! We are excited for your future, and to have Greenoaks and the other new investors on board!