Kozmo.com
 |
|
| Industry | Retail |
|---|---|
| Fate | Liquidation |
| Founded | 1998 |
| Defunct | 2001 |
| Headquarters | New York City, United States |
|
Key people
|
Joseph Park Yong Kang |
| Products | Online store, delivery service |
Kozmo.com was a venture-capital-funded online company that promised free one-hour delivery of "videos, games, dvds, music, mags, books, food, basics & more" and Starbucks coffee in several major cities in the United States. It was founded by young investment bankers Joseph Park and Yong Kang in March 1998 in New York City, and was out of business by April 2001. The company is often referred to as an example of the dot-com bubble. In September 2013, the website kozmo.com announced that they would relaunch soon.
Kozmo had a business model built around the delivery of small purchased goods within an hour by bicycle, car, truck, or public transportation for no delivery fee. The model was criticized by some business analysts, who pointed out that one-hour point-to-point delivery of small objects is extremely expensive and were skeptical that Kozmo could make a profit as long as it refused to charge delivery fees. The company countered in part that, in their target markets, savings due to not needing to rent space for retail stores would exceed the costs of delivery.
Kozmo.com's headquarters was located in New York City. According to documents filed with the Securities and Exchange Commission, in 1999 the company had revenue of $3.5 million, with a resulting net loss of $26.3 million. The company raised about $250 million, including $28 million from a group of investors in 1999 which included Flatiron, Oak and Chase and $60 million from Amazon.com in 2000. It entered a five-year co-marketing agreement with Starbucks in February 2000, in which it agreed to pay Starbucks $150 million to promote its services inside the company's coffee shops. This included up to 500 Starbucks locations to host drop-boxes in-store for the return of videos. Kozmo.com ended its deal in March 2001 after paying out $15 million. In July 2000, at the height of its business, the company operated in Atlanta, Chicago, Houston, San Francisco, Seattle, Portland, Boston, New York, Washington, D.C., San Diego and Los Angeles. Kozmo had filed an IPO with Credit Suisse First Boston, but it never went public.
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