The company says the downturn has had a “dramatic impact” on its rapid local commerce delivery business.
Almost one year to the day after closing a significant seed round, Toronto-based GoodGood has ceased operations after failing to secure additional capital. The rapid local commerce delivery startup announced the news on November 21 in a statement on its website.
GoodGood closed $6.5 million CAD in initial financing in November 2021 at a roughly $30 million valuation, amid clearer economic skies and a much hotter venture funding environment. Over the past 18 months, the firm built five cafes and a delivery network covering the majority of downtown Toronto.
“While we felt confident our business would be able to overcome many of these challenges, we were unable to secure the capital necessary to continue to bring our vision to life.”
But this year, market conditions have deteriorated significantly, and GoodGood has been forced to contend with high interest rates, inflation, and the prospect of what could be a prolonged economic downturn. According to GoodGood, while these conditions have had “a dramatic impact” on the company, GoodGood’s inability to secure more funding amid a much more challenging venture capital environment ultimately led to the rapid commerce firm’s undoing.
“The economic realities of rising interest rates, inflation, and a looming recession—economic factors that weren’t a reality when we began this journey—have had a dramatic impact on our business,” GoodGood wrote in the statement. “While we felt confident our business would be able to overcome many of these challenges, we were unable to secure the capital necessary to continue to bring our vision to life.”
When reached by BetaKit, GoodGood declined to provide further comment. BetaKit also reached out to some of the company’s investors for additional comments, but none have responded by publication time.
Rapid delivery startups in particular have been hit hard by the economic downturn. Larger companies in the space like Gopuff and Getir have laid off staff en masse and scaled back their operations, while fellow Canadian upstarts like Vancouver-based grocery delivery firm Tiggy, which closed $6.3 million last year around the same time as GoodGood, suspended its services in Toronto and Vancouver this summer.
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GoodGood was founded in April 2021 by a pair of former employees of Toronto social ordering app Ritual, co-founder Robert Kim and senior director of partnerships Kris Linney. Kim and Linney launched the quick local commerce company after seeing that despite increased demand for local commerce during COVID-19, there was a gap in the market in terms of accessing and discovering craft items like beer and specialty snacks.
“By nature, the [craft] industry is quite fragmented, and it’s actually hard, relatively hard, to get all of these products easily,” Kim told BetaKit last year.
Backed by a list of prominent investors that includes BKCM, Golden Ventures, Maple VC, Tet Ventures, Shopify’s Farhan Thawar, and Digital Main Street’s Chris Rickett, GoodGood’s vision was to help communities “access products from local craft makers easier and faster,” operating physical cafes around Toronto and delivering goods from them to customers in 30 to 60 minutes. According to LinkedIn, GoodGood had 27 employees as of this week.
“While GoodGood will cease operations, the emerging makers you love will continue to thrive,” GoodGood wrote in the statement. “Over the coming weeks, we will be sharing ways you can continue to support these makers by ordering directly or visiting local retailers who share a similar mission of supporting local, up-and-coming makers.
Feature image courtesy of GoodGood.