Aug 26, 2015 ยท 1 minute

Unlike Uber, Postmates has done the food delivery world a huge favor: It’s expanded gradually.

Well, gradually compared to the ridesharing world. As gradually as a company can when it raises some $136 million in venture capital.

Postmates-- unlike almost all leaders in every ecommerce and mobile commerce segment-- has insisted on growing at a rational pace, while protecting margins. Some would be investors have criticized Postmates for not going on more of a land grab. But other investors I’ve spoken with have been impressed with CEO Bastian Lehman’s restraint in such a free-spending environment.

Particularly since Uber has told him -- literally in 2012-- and through its actions recently that it’ll “see (him) in the trenches.” The crazy over-funded trenches lined with subsidy, customer acquisition gold.

The reason Postmates restraint matters is because the on-demand food delivery space-- companies like Postmates but also DoorDash, Munchery and a dozen or so others--  are likely on the cusp of a contraction according to what we wrote a few weeks ago and a new report by CB Insights that came out today. (This is distinct from the “non-demand” we-mail-you-ingredients-if-you-ask-a-month-in-advance group of food delivery startups. I’ll be writing more about that category in coming weeks.)

SpoonRocket and GoodEggs have already announced they are pulling back. CB Insights broke down 13 startups into three categories: Pure food delivery aka takeout 2.0, Fast food 2.0 or prepared meals delivered to you, and grocery services like Instacart.

Of all the companies in all the categories, Postmates is in the most markets with a whopping 24 cities. But Postmates-- and the delivery category in general-- had the lowest per-city costs. Postmates’ funding per city is just $5.7 million, which is comparable to DoorDash, but DoorDash is only in 11 cities. Far younger and unknown companies Favor and Peach had lower funding per city… which may signal they are stretched too thin.

Compare that to the Fast Food 2.0 category, where the leaders’ funding per city is near $30 million.
Yikes. No wonder Uber is eyeing the former category. It appears to be way more capital efficient and the free money won’t last forever.