Webvan Founder Is Back Just as Online Grocery Orders Take Off

September 3, 2020

MAY 12, 2020

Louis Borders, whose company Webvan Group Inc. epitomized dot-com era flameouts, is back with a new online grocery startup.

Called Home Delivery Service, it plans to open a 150,000-square-foot refrigerated warehouse in South San Francisco next year. Borders said the company will be able to process $200 million worth of groceries and other merchandise a year for same-day delivery in the Bay Area. If the plan succeeds, it will expand to big metro areas around the country.

Borders was ahead of his time with Webvan, which ran out of money in 2001 after expanding too quickly. But Home Delivery Service could be arriving at the perfect moment. With Americans hunkered down amid the pandemic and avoiding supermarkets, online grocery sales have spiked. Borders, who also co-founded the Borders bookstore chain, is betting he can grab a piece of the $840 billion U.S. grocery market and take on Walmart Inc. and Amazon.com Inc.

“Demand for [the online grocery] business is 10 times what it was just two months ago,” Borders said in a phone interview. “There’s plenty of demand.”

He said better automation and increased demand for home delivery will help the new company succeed where Webvan failed. Only 60 employees will be required to staff the warehouse, he said, compared with 200 in a similar facility operated by Webvan.