Avo, an Israeli startup that offers a service for delivering groceries, is in Trouble. The company is laying off 500 workers, two thirds of its total, 350 of whom are located in Israel. The company points to the Covid crisis as one of the key reasons that it is having trouble.
The news comes only about 8 months after Avo raised $45 million in a Series B funding round led by Insight Partners last September. The company has raised $80 million to date.
Founded in 2018 by CEO Dekel Valtzer , Idan Hershko, Nir Smadar and Neri Bluman, Avo says that it is defining the future of e-commerce through its “custom, white-labeled online stores for residential and commercial companies and property owners.” The company boasts that residents and employees order same-day delivery of anything from fresh groceries & personal care items to electronics and more.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at firstname.lastname@example.org.
So, what went wrong? Dekel Valtzer told Globes, “Covid and working from home forced us to move quickly from our original vertical of offices. When the offices returned to work, we did not know how to swallow both areas together. I think that there is a lot of potential in the field of home deliveries but I couldn’t bury my head in the sand regarding the change in market conditions and endanger hundreds of employees.”
But another problem for Avo might have been how it could differentiate its service from the many similar delivery companies that operate today. “I live in New York where there are at least six apps that will deliver a can of coke to your home within 10 minutes. It is clear that these models cannot continue working and this market in which companies like Instacart, DoorDash and others operate is shrinking,” said Valtzer. But he insisted that Avo has a very different business model than those other firms if it is given enough time to do so.