Jump to content

Kozmo.com

From Alfawiki
Adapted from the English Wikipedia article Kozmo.com, available under CC BY-SA 4.0Updated 9 August 202516 sources


Kozmo.com
IndustryRetail
Founded1998
Defunct2001
FateLiquidation
HeadquartersNew York City, United States
Key people
Joseph Park
Yong Kang
ProductsOnline store, delivery service

Kozmo.com was a venture capital-backed internet enterprise that offered complimentary one-hour delivery of a variety of items including "videos, games, DVDs, music, magazines, books, food, essentials and more"[1] along with Starbucks coffee across multiple major metropolitan areas in the United States. Established in March 1998 by former investment bankers Joseph Park and Yong Kang in New York City, the company ceased operations by April 2001. It is frequently referenced as a case study of the dot-com bubble.[2] In January 2013, Yummy.com acquired the brand and announced plans for a relaunch. By March 2018, Kozmo was reintroduced as a warehouse club.[3] As of July 2023, the Kozmo.com website is no longer accessible.

Model

Kozmo’s operational strategy centered on delivering small consumer purchases within an hour using bicycles, cars, trucks, or public transit—all without charging any delivery fees.[4] Some industry experts criticized this approach, arguing that providing rapid point-to-point delivery for small items is highly costly and questioned the company’s ability to achieve profitability while offering free delivery.[5] Kozmo responded by highlighting that eliminating expenses related to physical retail storefronts in their target cities could offset the costs associated with delivery.

History

Based in New York City, Kozmo.com reported $3.5 million in revenue for 1999 but posted a net loss of $26.3 million according to filings with the Securities and Exchange Commission.[6] The company raised approximately $250 million in funding rounds, including a $28 million investment in 1999 from firms such as Flatiron, Oak, and Chase[7] as well as a $60 million infusion from Amazon.com in the year 2000.[8] In February of 2000, Kozmo entered into a five-year co-marketing partnership with Starbucks, agreeing to pay $150 million ($Template:Format price adjusted for inflation) to advertise its services within Starbucks locations.[9] This arrangement included placing drop-boxes for video returns inside up to five hundred Starbucks outlets.[10] However, Kozmo terminated this agreement in March of the following year after disbursing $15 million (~$Template:Format price inflation-adjusted). At its operational peak in July 2000, Kozmo was active in cities including Atlanta, Chicago, Houston, San Francisco, Seattle, Portland, Boston, New York, Washington, D.C., San Diego, and Los Angeles.[4] Although Kozmo filed for an IPO with Credit Suisse First Boston as its underwriter, it never completed a public offering.[11]

In April of the year 2000, an investigative report by MSNBC journalists Brock N. Meeks and Elliot Zaret alleged that Kozmo was selectively excluding predominantly African American neighborhoods within its service areas—a practice known as redlining. The company denied that racial factors influenced their delivery zones and stated that selections were based primarily on internet adoption rates.[12] The Washington D.C.-based civil rights organization Equal Rights Center (ERC), cited in the report, engaged with Kozmo regarding these concerns. Subsequently that year, ERC announced a collaborative initiative with Kozmo affirming that the company’s initial service boundaries were not racially motivated; furthermore, Kozmo pledged $125,000 to enhance internet access within underserved populations.[13]

The service gained popularity among college students and young urban professionals,[14] but following the collapse of the dot-com bubble it abruptly ceased operations in April 2001. The closure resulted in layoffs affecting roughly eleven hundred employees.[15][16] Many employees at its eighteen locations discovered the shutdown only upon arriving for scheduled shifts to find stores closed. Soon thereafter those outlets along with their distribution center in Memphis were liquidated by an experienced entertainment wholesaler based in Florida.Template:Fix/category[citation needed]

Post-Kozmo Developments

The company's rise and eventual outcome are chronicled in the documentary film e-Dreams, which premiered in June 2001. In April 2005, Chris Siragusa, the former CTO of Kozmo, initiated MaxDelivery, a service operating in downtown Manhattan that mirrored Kozmo’s model by delivering food, wine, DVDs, and everyday necessities. This enterprise remained active as of November 2018.

Joseph Park, who co-founded Kozmo and served as CEO, went on to establish Askville in 2006; this platform was later acquired by Amazon.com. In June 2009, Park departed from Amazon to assume the presidency of BibleGateway.com, a subsidiary of Zondervan, a Christian publishing house under the umbrella of HarperCollins, which itself is owned by News Corp..

Yong Kang, another co-founder, returned to the financial sector and by June 2008 was engaged in investment banking at Lehman Brothers (currently operating as Barclays Capital).

Despite the collapse of many dot-com ventures, certain grocery delivery services that offered online ordering with same-day delivery endured beyond the bust. Throughout the 2010s, multiple rival same-day delivery companies emerged within major U.S. metropolitan areas.

See also

References

  1. ↑ "Kozmo.com Splash page". Kozmo.com. Archived from the original on 2000-04-08. Retrieved 2010-07-10.
  2. ↑ Wahlgren, Eric (March 20, 2001). "Legacies of the Dot-Com Revolution". Business Week. Archived from the original on April 5, 2001. Retrieved 2007-07-17.
  3. ↑ Melton, James (March 23, 2018). "Online grocery pioneer Kozmo.com returns as a warehouse club". Retrieved 2018-04-05.
  4. ↑ 4.0 4.1 Wu, John C. (November 1, 2001). "Anatomy of a Dot-Com". Supply Chain Management Review. Archived from the original on August 21, 2004. Retrieved 2007-07-17.
  5. ↑ Dukcevich, Davide (June 22, 2000). "Kozmo.com Pedaling To The Precipice?". Forbes. Retrieved 2010-04-16.
  6. ↑ "Kozmo Com Inc SEC filing · S-1 · On 3/20/00". SECInfo.com. March 20, 2000. Retrieved 2008-01-07.
  7. ↑ "Kozmo.com Receives $28 Million from Flatiron, Oak Investment, Chase Capital and Others". Business Wire, Press Release. October 13, 1999. Retrieved 2010-03-11.
  8. ↑ Greenspan, Sharon (March 20, 2000). "Press Release: Amazon.com Announces Investment..." Amazon.com. Archived from the original on November 3, 2017. Retrieved 2007-07-17.
  9. ↑ Wilcox, Joe (February 14, 2000). "Kozmo.com sees more sales in Starbucks deal". News.com. Retrieved April 16, 2010.
  10. ↑ "Kozmo.com will pay Starbucks $150M". February 14, 2000. Retrieved April 29, 2015.
  11. ↑ Sandoval, Greg (February 29, 2000). "Kozmo may deliver itself to the public". News.com. Retrieved 2010-04-16.
  12. ↑ Zaret, Eliot; Meeks, Brock (April 11, 2000). "Kozmo's digital dividing lines". MSNBC.com. Archived from the original on December 17, 2000. Retrieved 2010-03-11.
  13. ↑ "Kozmo.com and Equal Rights Center Announce Initiative to Bridge the Digital Divide". Business Wire. December 5, 2000. Archived from the original on 2012-10-18. Retrieved 2010-03-11.
  14. ↑ Casselman, Ben (April 17, 2001). ""Kozmo.com Website Goes Out of Business"". Columbia Spectator. Archived from the original on 2011-07-08. Retrieved 2007-07-17. {{cite news}}: Check date values in: |date= (help); no-break space character in |date= at position 6 (help)
  15. ↑ Sandoval, Greg (April 11, 2001). "Kozmo to shut down, lay off 1,100". News.com. Retrieved 2010-04-16.
  16. ↑ "Kozmo.com Ceases Operations, Fires Entire 1,100-Person Staff ". hive4media.com . April 12, 2001 . Archived from the original on April 20, 2001 . Retrieved September 23, 2019 . {{cite web}}: Check date values in: |accessdate=, |date=, and |archivedate= (help); no-break space character in |accessdate= at position 10 (help); no-break space character in |archivedate= at position 6 (help); no-break space character in |date= at position 6 (help); no-break space character in |title= at position 42 (help); no-break space character in |website= at position 19 (help)

External links

Template:Dot-com Bubble

Related profiles

EEToys.comAAllAdvantageHHealtheonBBroadcast.com
Retrieved from "https://www.alfawiki.org/index.php?title=Kozmo.com&oldid=31392"