Stockwell AI came into the world with a bang, but he went away with a groan. Founded in 2017 by former Googlers, the AI vending machine start-up formerly known as Bodega first raised blood pressure – people hated the way it referred and got it ‘upset’ ‘mom and pop stores in one fell swoop – and then raised a lot of money. But ultimately, it was not the match for COVID-19 and the success it had on the way we live.
ClearTipsNews has learned and confirmed that Stockwell will close at the end of this month after it has not been able to find a viable business for its “smart” vending machines controlled by apps stored with convenience store items.
“Unfortunately, the current landscape has created a situation in which we can no longer continue operations and will close the business on July 1,” wrote co-founder and CEO Paul McDonald in an email to ClearTipsNews. “We are deeply grateful to our talented team, our incredible partners and investors and our incredible buyers who made this possible. While this is not the way we want to end this journey, we are confident that our vision to bring the store to where people live, work and have fun will continue through other companies, products and services. incredible. “
We initially reached out after being notified by someone who had received an email about the closure. Stockwell’s vending machines were distributed mainly in apartments and office buildings, and he contacted these customers last week to announce the news.
For what it’s worth, the building operator who used Stockwell’s vending machines said he was actively looking for a replacement supplier, so it appears to have been used, but more specifically, it been very difficult for the vending industry, where some distributors experienced business losses of up to 90%.
The closure of Stockwell is remarkable because it highlights how, in the current climate, having a solid list of donors and a very decent amount of funding cannot always guarantee isolation for everyone.
Last September, Stockwell raised at least $ 45 million in financing from investors, including NEA, GV, DCM Ventures, Forerunner, First Round and Homebrew. Its network had grown to 1,000 “stores,” intelligent vending machines that function much like advanced hotel minibars: sensors detect you and charge you for what you take out, and you use a smartphone app for both track what you buy and pay for it. .
Last fall, the company seemed to be preparing for a broadening of its economic model, allowing its customers (managers of buildings, offices and apartments) to have more weight in what was stored beyond items stored by Stockwell himself in his machines, which included water and other beverages, salty and sweet snacks and a few basic items like laundry detergent and pain relievers.
In December, it seems that McDonald’s co-founder, Ashwath Rajan, had quietly left the startup, then that 2020 has taken off, COVID-19 has taken its toll.
First, consumers found themselves spending a lot more time working and just staying at home, going out less and buying in bulk to minimize purchasing efforts. This, in turn, has had a significant impact on the sustainability of business models based on occasional small purchases, such as the type one would typically do from vending machines like Stockwell.
Second, at a time when many are trying to minimize the spread of infection by wearing face masks, washing their hands, and minimizing the touch of random objects, a big question mark hangs over the whole concept of dispensers. without supervision, and if they can be properly disinfected. . This has had an impact not only on the people buying the items, but on the workforce to help store and maintain these kiosks.
There have been some interesting twists in the way the sales industry has managed COVID-19. Some exchange pretzels and Snickers and replace them with PPE equipment, and others find the option of storing them with healthy food specifically for frontline workers who have no other options and who need to quick but nutritious solutions during critical periods.
But more generally, the vending industry has been hit hard by the pandemic.
The broader market in a normal year is estimated to be around $ 30 billion a year – one reason Stockwell née Bodega likely caught the eye of investors – but business has fallen off the cliff for many key operators .
The President of the European Vending Association, in an appeal to heads of government for financial assistance in April, said business had fallen 90% and described COVID-19 as having a “devastating effect” on the economy. sector. Difficult figures for the world of Pepsi and Mondelez (née Kraft), but surely the nail in the coffin for a young and promising start-up of AI-based vending machines that some doubted nevertheless from the start.