Challenger to Watch 2019: Zume Pizza

For making fast food go faster

When SoftBank invested $375m in a 3-year-old pizza startup Zume, that valued the company at $2.2Bn… Wait, what?! That must be some slice.

Turns out it is. Part of Zume’s secret is the pizzas are part-baked in the company’s central commissary and then finished en route in a truck with dozens of mini pizza ovens on board. Software calculates the precise time it will take to get to you ensuring your pie is piping hot and crispy upon arrival. And it’s a healthier pizza too (if that’s not an oxymoron) as the crusts require no artificial stuff to keep them crunchy, like those from the big chains.

The pies are made in a “co-bot” facility — part robot, part human assembly — that can bang out pizzas at 10x the rate of a human-only pie shop. The cost savings of having no store fronts and fewer people is invested in higher quality ingredients and up-skilling people. Those whose work hasn’t been replaced by the bots are full-time employees with full benefits.

Zume claims this new model beats the conventional one on price, quality and speed of delivery, which if true is a compelling value proposition.

“In the end, what matters most to the consumer is the food.”

The reasons for that monster valuation though…? Well, this being Silicon Valley, Zume is less a pizza company and more a food service platform. It’s taking its robot know-how and “baked on the way” technology and preparing to disrupt other QSR formats. It’s this vision that has excited SoftBank.

Of course, in the end, what matters most to the consumer is the food. With the better pizza movement well underway in the US, led by startups like Blaze — who, among others, are doing for pizza what Chipotle has done for Mexican and Five Guys for burgers — expectations have been raised. And, in truth, Zume has had mixed reviews. It has a few issues to resolve:

First, execution. To be worth $2.2 billion the company needs to execute well 99% of the time. Or at least a lot better than Dominos, who’ve been no slouches themselves.

“It’s going to take something special to pry Dominos one-click app out of the white-knuckled hands of a Red Dead Redemption player.”

Two, marketing wizardry. Too many Valley types still believe Ralph Waldo Emerson’s maxim that “build a better mousetrap and the world will beat a path to your door.” Not in a world this full of distractions. It’s going to take something special to pry Dominos one-click app out of the white-knuckled hands of a Red Dead Redemption player.

Third, who’s going to buy all the pizzas if a good deal of America’s 15 million restaurant workers are out of work? Maybe that’s what UBI is for and why Andrew Yang should be the next US President. Now there’s a challenger to watch.