Summarized by AI Model:Overglitch/t5-small-cnn-dailymail
At least $150 million has been raised for about 10 unsuccessful enterprises . The transaction has also sparked doubts about the link between Miso Robotics and Jordan's Piestro .After acquiring Vebu Inc., an automation incubator, Serve Robotics Inc. (NASDAQ:SERV), best known for its sidewalk robots that deliver meals for Uber (NYSE:UBER) Eats in Los Angeles, is under investigation.Given Vebu’s track record of failed prototypes and its emphasis on a commercial robot for avocado processing rather than delivery, some have criticised the November 7, 2024, announcement, arguing that it unjustly benefits insiders.
According to short-seller Bonitas, James Buckly Jordan, the director of Serve, has a history of soliciting money for robotics projects that don’t work commercially. At least $150 million has been raised for about 10 unsuccessful enterprises.Notably, despite substantial pre-order claims, Miso Robotics and Jordan’s Piestro, a pizza robot startup, failed to fulfil their revenue targets. The transaction has also sparked doubts about the link between Jordan and Chipotle (NYSE:CMG), a major investor and customer of Vebu. After the agreement was announced in July 2023, a former Vebu employee revealed difficulties growing the Autocado prototype with Chipotle, which resulted in a drop in revenue and the deployment of just one shop. After hearing of the acquisition, Jordan reportedly cut his SERV holdings by 20%.
Ali Kashani, the CEO of Serve, had set lofty goals, aiming to deploy 2,000 robots by the end of 2025 and generate $60–80 million in revenue annually. However, Serve only had 59 robots operating every day as of the third quarter of 2024—less than 3% of its goal. There is scepticism about Serve’s revenue estimates, and industry analysts don’t think the firm will achieve its objectives.
third-party advertising. Investing.com makes no recommendations or offers. Remove advertising or view disclosure here. Additionally, Uber Eats, Serve’s biggest investor and delivery partner, has been interacting with Serve’s rivals for sidewalk robot deliveries both domestically and abroad. Other delivery services including DoorDash (NASDAQ:DASH) and GrubHub (NYSE:GRUB), along with rivals Avride and Coco Robotics, have chosen to use substitutes, which are said to be 90% less expensive than Serve’s robots.
Serve’s software licensing partnership with Magna International (NYSE:MGA), which was once a major source of revenue, has also faltered. Serve paid $5.3 million for manufacturing costs and gave $15 million in $0.01 warrants to Magna, but the returns have been meagre, with revenues falling by more than 95% as of the third quarter of 2024. Given these difficulties, the competition in last-mile delivery, and Serve’s inability to draw in third-party commercial interest, Bonitas has taken a short position in Serve Robotics, expecting its stock to drop sharply.
