Webvan stock certificate 2001
Colorful company logo of a grocery bag as the certificate vignette. The biggest dot-com bomb according to many. Issued and not cancelled. Dated 2001.
Webvan was an online "credit and delivery" grocery business that went bankrupt in 2001. It was headquartered in Foster City, California, USA, in Silicon Valley. It delivered products to customers' homes within a 30-minute window of their choosing. At its peak, it offered service in ten US markets: San Francisco Bay Area, Dallas, San Diego, Los Angeles, Chicago, Seattle, Portland, Atlanta, Sacramento, and Orange County. The company had hoped to expand to 26 cities.
In June 2008, CNET named Webvan the largest dot-com flop in history, placing it above Pets.com and eight other sites on its list. It is now owned and operated by Amazon.com
Webvan was founded in the heyday of the dot-com bubble in 1996 by Louis Borders, who also co-founded the Borders bookstore in 1971. Venture capitalists, including Benchmark Capital, Sequoia Capital, Softbank Capital, Goldman Sachs, and Yahoo!, invested more than $396 million in Webvan. They encouraged it to rapidly build its own infrastructure to deliver groceries in a number of cities. Some journalists and analysts considered this a serious error of judgment, and blamed it on the fact that none of Webvan's senior executives had any management experience in the supermarket industry, including its CEO George Shaheen who had resigned as head of Andersen Consulting (now Accenture), a management consulting firm, to join the venture.
The company raised $375 million in an initial public offering in November 1999 that valued the company at more than $4.8 billion. Up to that time, the company had reported cumulative revenue of $395,000 and cumulative net losses of more than $50 million.
HomeGrocer, a similar company, started operating the year before Webvan. It went public in March 2000 and, like Webvan, was losing large amounts of money. On 26 June 2000, Webvan bought out HomeGrocer. While Webvan was popular, the money spent on infrastructure far exceeded sales growth, and the company eventually ran out of cash. Webvan placed a $1 billion (USD) order with engineering company Bechtel to build its warehouses, and bought a fleet of delivery trucks.
As part of its shutdown process, all non-perishable food was donated to local food banks. Webvan's legacy consists of thousands of colored plastic shipping bins, now used for household storage and their re-painted distinctly-shaped vans seen in the San Francisco area years later.