Report: pizza-making robot startup Zume, which raised $375M from SoftBank Vision Fund in 2018, plans to lay off up to 400 staff, or about 80% of its employees
Zume's 2020 cut is the middle act of an arc that began with SoftBank's conviction: after talks of a $500M-$750M check, the Vision Fund put in $375M at a planned $2.25B valuation for trucks that bake pizza en route. Eighteen months later, up to 400 of those jobs — roughly 80% of the company — are going.
The layoffs proved to be a waypoint rather than a reset: by mid-2023 Zume had shut down entirely and entered liquidation, having burned through $445M total. This report is where the SoftBank-backed automation thesis visibly started to fail.
First-order effects
Up to 400 Zume employees lose their jobs as the company abandons most of its robot-pizza operation, leaving only a fraction of the team that SoftBank's $375M was meant to scale.
Second-order effects
SoftBank Vision Fund's flagship bet on capital-intensive food automation becomes a public mark against its portfolio strategy, pressuring the fund toward burn-cutting across similarly hardware-heavy bets.
Third-order effects
The trajectory from $2.25B valuation to 80% layoffs to liquidation hardens into the template for mega-round robotics startups that never reached unit economics — and for SoftBank's own retreat from aggressive investing toward caretaking existing positions.
The trend: SoftBank-era mega-funded automation startups are collapsing under their own cost structures, with each round of layoffs marking another step from growth-at-all-costs toward liquidation.
45 days apart, over the holidays no less. This is how devastating it is for a co when a VC breaks a signed term sheet. Zume Pizza Nov 22, 2019: $4B https://www.vox.com/... Zume Pizza Jan 6, 2020: Done https://www.reuters.com/...
Who would have thunk that a pizza making robot startup wouldn't pan out (pun intended) when you can get a pizza made by, and delivered by a human to your house for $5? https://twitter.com/...
I went to a robotic coffee shop when I was in San Francisco (not sure if it was a Cafe X or not) and it was one of the worst experiences I've ever had. Totally pointless. Extra steps imposed on the user. And the coffee was mediocre. https://twitter.com/...
It was a bad day for food robots. 🍕 Zume lays off 80% of staff. 🍔 Creator can't close SoftBank round worth hundreds of millions. ☕️ CafeX closes 3 coffee bars, tells employees to take unpaid leave. https://www.businessinsider.com/ ...
I would lolwut this except there are real people losing their jobs and this isn't just silicon valley dudebros having their term sheets declined. https://twitter.com/...
Whoah, SoftBank is breaking termsheets. Watch out, founders. This is one of the most damaging things that can happen to a startup. https://www.axios.com/...
SoftBank's arrogance in response to a story of it reneging on term sheets is insane: “Given we're a fiduciary and investing very large amounts of capital, our investment process is more rigorous than unregulated investors and typical VCs.” https://www.axios.com/...
SoftBank's weaselly explanation ("our investment process is more rigorous than unregulated investors and typical VCs"), if it were true, would imply that they'll continue to break termsheets. So if you take them at their word (I don't), you should avoid them forever.
Time kills deals. As these startups signed exclusive term sheets and waited for SoftBank, their hands were tied from finding other sources. This is very odd. I've not seen this happen much. SoftBank is big league, doing little league behavior. https://twitter.com/...
In the past few months, Softbank has walked away from investing in several startups even after submitting term sheets. For sought after startups where VCs are competing to get into a deal, this is not a good look for Softbank. https://twitter.com/...