What the business is
Subscription food-delivery service with pre-reserved lunch and dinner orders from partner restaurants in San Francisco, the Bay Area and New York City.
The bet
That pre-scheduled weekly meal plans would let restaurants cook efficiently and keep delivery at $5.99 a dish plus a $2 fee.
Starting capital
$3.5M seed in 2021, plus a $10.25M seed II round, $13.75M in total (per TechCrunch)
How it started
Club Feast emerged from stealth in 2021 with $3.5M in seed funding backed by General Catalyst and Pika Capital. Co-founders Atallah Atallah, Ghazi Atallah and Chris Miao worked with hundreds of restaurants to offer meals at $5.99 a dish plus a $2 delivery fee, with a $7.99-a-month Feast Pass removing delivery fees.
What happened
By mid-2021 meals were $6.99, with an 18% service fee and variable fees for faster delivery; by early 2022 customers saw entrees at $8.50 to $9.99. Customers could not use credits for dinner or weekend orders, then the app and website stopped working in June, while the homepage advertised corporate catering at $60 to $300 per employee per month.
How it ended up
By August 2022 Club Feast had effectively abandoned consumers for corporate catering; the founder disputed customer accounts of lost credits and slow refunds.
What has to be true
Restaurants increased prices, which Atallah blamed for the end of the $5.99 promise, citing roughly 10% inflation.
Prices rose from $5.99 to $6.99 within a year of launch, and an 18% service fee was added.
Atallah said return-to-office demand for food as an employee perk made corporate catering a larger opportunity.
Customers said Club Feast did not proactively explain price changes, which fed the reaction when the consumer product disappeared.
What can be applied
A price promise sells a subscription, but it binds you to it. If the unit economics break, change the offer openly before you change the business.
Aftermath
As of 4 August 2022, Club Feast's LinkedIn page listed more than 100 employees, it had raised $13.75M in total, and it was recruiting catering delivery drivers. TechCrunch could not sign up for a consumer account, and some subscribers said they were still being charged and could not close their accounts, which the company disputed.
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