Editing Webvan (section)

==History==
[[Image:Webvan logo.png|thumb|Webvan logo as seen on an orphaned shipping bin]]
Webvan was founded in the heyday of the [[dot-com bubble]] in 1996 by [[Louis Borders]], who also co-founded [[Borders (retailer)|Borders]] in 1971.<ref>{{cite news | url=https://www.businessinsider.com/louis-borders-webvan-founder-hds-2014-4 | title=The Founder Of A Dot-Com Disaster Is Giving His Old Grocery Delivery Idea Another Shot | first=Jillian | last=D'Onfro | work=[[Business Insider]] | date= April 18, 2014}}</ref>

===Growth===
The company's investors pressured it to grow very fast to obtain [[first-mover advantage]].<ref>{{cite book | url=https://books.google.com/books?id=FZ4ttymUuwcC | last1=Finkelstein | first1= Sydney | last2=Harvey | first2=Charles | last3=Lawton | first3=Thomas | title=Breakout Strategy: Meeting the Challenge of Double-digit Growth | publisher=[[McGraw-Hill Education]] | year=2007 | page=200 | isbn=978-0-07-145231-1 }}</ref> This rapid growth was cited as one of the reasons for the downfall of the company.<ref name="techcrunch">{{cite news | url=https://techcrunch.com/2013/09/27/why-webvan-failed-and-how-home-delivery-2-0-is-addressing-the-problems/ | title=Where Webvan Failed And How Home Delivery 2.0 Could Succeed | first=Peter | last=Relan | work=[[TechCrunch]] | date=September 27, 2013}}</ref> Webvan started taking orders in the San Francisco Bay Area in June 1999.<ref>{{Cite book | title=The Wisdom of Failure: How to Learn the Tough Leadership Lessons Without Paying the Price | last=G. Weinzimmer | first=Laurence}}</ref>

Webvan placed a $1 billion order with [[Bechtel]] to build its warehouses, and bought a fleet of delivery trucks.<ref>{{cite news | url=https://www.cnet.com/news/seeking-relics-amid-webvans-ruins/ | title=Seeking relics amid Webvan's ruins | last=Wolverton | first=Troy | work=[[CNET]] | date=October 30, 2001}}</ref> In 2000, Webvan bought [[HomeGrocer]], a competitor that was also losing money, for $1.2 billion in stock.<ref>{{cite news | url=https://money.cnn.com/2000/06/26/deals/webvan/ | title=Webvan goes shopping | first=Luisa | last=Beltran | work=[[CNN]] | date=June 26, 2000}}</ref><ref>{{cite news | url=https://www.nytimes.com/2000/06/27/business/webvan-will-acquire-homegrocercom.html | title=Webvan Will Acquire HomeGrocer.com | first=LAWRENCE M. | last=FISHER | work=[[The New York Times]] | date=June 27, 2000}}</ref> At its peak in 2000, Webvan had $178.5 million in sales but it also had $525.4 million in expenses.<ref name="shutsdown" />

===Financing===
[[Benchmark Capital]], [[Sequoia Capital]], and Borders each invested $3.5 million in the company in a [[Series A round]] in 1997, buying shares for $9.58 each.<ref name=lessons>{{cite news | url=https://www.sfgate.com/bayarea/article/Venture-lessons-in-Webvan-collapse-Financing-2899418.php | title=Venture lessons in Webvan collapse / Financing history a cautionary tale | first=Carol | last=Emert  | work=[[San Francisco Chronicle]] | date=July 15, 2001}}</ref> Sequoia later invested another $50 million, [[Softbank Capital]] later invested $160.3 million, and Goldman Sachs' venture arm invested $50 million.<ref name=lessons/> [[E-Trade]] and [[Yahoo!]] each invested $10 million.<ref name=lessons/> In total, venture capitalists invested more than $396 million in Webvan.

The company raised an additional $375 million in an [[initial public offering]] in November 1999, during the [[dot-com bubble]] that valued the company at more than $4.8 billion.<ref name=stockprice>{{cite news | url=https://www.nytimes.com/1999/11/06/business/webvan-stock-price-closes-65-above-initial-offering.html | title=Webvan Stock Price Closes 65% Above Initial Offering | first=MATT | last=RICHTEL | work=[[The New York Times]] | date=November 6, 1999}}</ref> Up to that time, the company had reported cumulative revenue of $395,000 and cumulative net losses of more than $50 million.<ref>{{cite web | url=https://www.sec.gov/Archives/edgar/data/1092657/000089161899004914/0000891618-99-004914.txt | title=FORM 424(B)(1), Webvan Group, Inc | publisher=[[U.S. Securities and Exchange Commission]] | date=November 5, 1999}}</ref>

===Management===
None of Webvan's senior executives or major investors 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.<ref name=stockprice/> Webvan had a contract to pay Shaheen, who gave up a $4 million per year salary at Andersen, $375,000 per year for life.<ref>{{cite news | url=https://money.cnn.com/2001/05/16/technology/webvan/index.htm | title=Webvan pays off Shaheen | work=[[CNN]] | date=May 16, 2001}}</ref> When the company filed bankruptcy in July 2001, Shaheen was an [[unsecured creditor]].<ref>{{cite news | url=https://lasvegassun.com/news/2001/jul/09/nevadans-lose-jobs-at-nets-webvan/ | title=Nevadans lose jobs at 'Net's Webvan | work=[[Las Vegas Sun]] | date=July 9, 2001}} "The company's list of unsecured creditors will include Webvan's former CEO George Shaheen, who resigned in April, triggering a clause in his contract that required the company to pay him $31,250 per month for the rest of his life. With the bankruptcy, Shaheen "will have to get in line with the rest of our creditors," Grebey said."</ref> Shaheen resigned in April 2001, while the company was on the verge of shutting down.<ref name=quitsaltlanta>{{cite news | url=https://money.cnn.com/2001/04/26/technology/webvan/index.htm | title=Webvan quits Atlanta | work=[[CNN]] | date=April 26, 2001}}</ref>

===Bankruptcy===
The company lost over $800 million and shut down in June 2001, filing for  [[bankruptcy]] and laying off 2,000 employees.<ref name=under>{{cite news | url=https://www.sfgate.com/news/article/Webvan-goes-under-Online-grocer-shuts-down-2901586.php | title=Webvan goes under / Online grocer shuts down -- $830 million lost, 2,000 workers fired | first=Ray | last=Delgado | work=[[San Francisco Chronicle]] | date=July 9, 2001}}</ref><ref name=shutsdown>{{cite news | url=https://money.cnn.com/2001/07/09/technology/webvan/ | title=Webvan shuts down | work=[[CNN]] | date=July 9, 2001}}</ref> As part of its shutdown process, all non-perishable food was donated to local food banks.<ref>{{cite news | url=https://www.zdnet.com/article/webvan-bags-it-for-good-5000117745/ | title=Webvan bags it for good | work=[[ZDNet]] | date=July 9, 2001}}</ref><ref>{{cite news | url=https://www.cnet.com/news/webvan-delivers-its-last-word-bankruptcy/ | title=Webvan delivers its last word: Bankruptcy | first=Greg | last=Sandoval | work=[[CNET]] | date=September 7, 2007}}</ref>