Multifamily Operators and Ghost Kitchens: The Economics of Private Delivery

At the early onset of the pandemic, multifamily technology companies bringing amenities to residents (think cleaning, dog walkers, handymen) experienced their worst nightmare: they could no longer enter multifamily apartments. Should they curtail operations, lay off team members and wait until the dust of the pandemic settles or focus their limited resources on a new service line that was experiencing a ton of customer demand? One of our portfolio companies faced this exact dilemma. The proposed service line in question was private meal delivery. Residents clearly needed food delivery – but how could they compete with DoorDash/UberEats? Would their software be adaptable enough to make the pivot from other services operations to food? Would they sacrifice their unit economics in the process? At Shadow, we watch to see how platforms use technology to respond to external factors. This memo breaks down what we see as a business model innovation in an amenity services platform, including flexible software tools, ability to scale quickly, and growing network effects that create a sustainable advantage.

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