Ultrafast delivery service shuts down, cites Ukraine war sanctions
The crowded ultrafast delivery space in New York and Chicago just got some breathing room, with sanctions on Russia playing a role.
Buyk, an ultrafast delivery service that launched in Manhattan in September 2021 with a promise of fulfilling online and mobile orders in 15 minutes or less, is ceasing operations. The company, which operated a network of 39 delivery-only “dark stores” in New York and Chicago, has filed for voluntary Chapter 11 bankruptcy relief in the U.S. Bankruptcy Court for the Southern District of New York.
Buyk intends to use the Chapter 11 proceedings to wind down operations and dispose of inventory and assets. As of March 4, 2022, the company has ceased all operations from its 39 stores in New York City and Chicago. The company’s founders, Rodion Shishkov and Slava Bocharov, previously started and ran Russia-based European ultrafast delivery service Samokat.
In an official statement, Buyk CEO James Walker alluded to the current war in Ukraine and related sanctions on Russian financial transactions as key factors in the company’s decision to call it quits. Buyk raised $46 million from CM Ventures, Fort Ross, Citius and other investors in a funding round ahead of its initial September 2021 launch.
“We have diligently explored all possible options and partnerships to restructure Buyk and keep the business going, however, the war in Ukraine and subsequent restrictions in funding have unfortunately made it impossible to continue operations,” said Walker. “I am extremely proud of the entire Buyk team for their amazing achievements since we launched the business last year. These are truly some of the most talented and dedicated people I have had the pleasure to work with in my career and I wish them much success in the future.”
The company delivered groceries and essential items to customers’ doorsteps in 15 minutes or faster – with no minimum spend and no delivery fee. Like two other ultrafast delivery services which opened in New York City earlier in 2021, Jokr and Gorillas, Buyk relied on dark stores for fulfillment. Each dark store is stocked with 2,000-3,000 SKUs, to deliver groceries and other essentials to customers’ doors in 15 min or faster.
[Read more: Ultrafast delivery is gaining momentum]
The dark stores were strategically located to enable maximum coverage in the quickest possible time and are fitted with Buyk’s proprietary technology to optimize the speed of order picking and delivery. Buyk’s technology also provided its personnel with detailed information on a hyperlocal level, to ensure each dark store is stocked according to the specific needs and desires of consumers in that particular area. The company had also intended to develop a private label.
Buyk’s closure is somewhat surprising, as in February 2022 it launched a partnership with Grubhub to bring ultrafast grocery delivery to the Grubhub marketplace through Buyk- and Grubhub-branded concepts. The fulfillment and delivery of orders were handled by Buyk.
In addition to Buyk, Jokr and Gorillas, the ultrafast delivery space includes dedicated services such as Gopuff and Gettir; as well as targeted offerings from larger delivery platforms such as Instacart and DoorDash. The sector will bear watching in the coming months to see if Buyk’s issues really were mostly caused by sanctions on Russian financing, or if the ultrafast model may have deeper issues.