Dive Brief:

• Takeoff Technologies filed for Chapter 11 on Thursday with a plan to seek buyers for some or all of its assets.
• The grocery e-commerce fulfillment provider is requesting the United States Bankruptcy Court for the District of Delaware to approve an agreement where a consortium of its customers will provide approximately $9.6 million in debtor-in-possession financing. This financing would allow the company to keep operating while it goes through a marketing and sale process, according to the company.
• Takeoff said that if no viable or qualified bidders buy the company, that consortium of customers may acquire some or all of its business. 

Dive Insight:

The move by Takeoff comes at a time when grocery e-commerce has taken a backseat in the grocery industry. While grocery e-commerce — and demand for service providers to help streamline online order fulfillment — quickly rose during the pandemic, grocers have now pivoted their attention to retaining price-sensitive shoppers and grappling with the fading sales boosts they had received from the pandemic and inflation.

Takeoff said it plans to have an “orderly wind down of any assets that are not acquired through the sale process.”

Before filing for Chapter 11, the company said it explored alternatives to address its recent financial challenges and absence of additional equity funding.

“Takeoff is taking this necessary next step after careful consideration and in consultation with management, advisors, and the Board. The interest demonstrated by our customers in continuing to do business with us demonstrates the strong need for Takeoff’s products and services in the marketplace,” Takeoff Chief Restructuring Officer John DiDonato, who is also managing director at Huron Consulting Group, said in a statement.

Takeoff has its first hearing on Friday regarding its petition to seek relief under Chapter 11. 

Founded in 2016, Takeoff has counted Wakefern Food, Chilean grocer SMU and Albertsons among its list of partners. In October 2023, Hy-Vee said it was working with Takeoff to develop micro-fulfillment centers in certain areas where the grocer operates. Takeoff and Knapp announced in February they were working together on hardware and software innovation for grocery e-commerce.