The story
Kozmo.com's headquarters was in New York City. According to documents filed with the Securities and Exchange Commission, in 1999 the company had revenue of $3.5 million, with a resulting net loss of $26.3 million. The company had raised probably about $250 million, including $28 million from a group of investors in 1999 which included Flatiron, Oak and Chase and $60 million from Amazon.com in 2000. It had entered a five-year co-marketing agreement with Starbucks in February 2000, in which it agreed to pay Starbucks $150 million ($259 million in 2024) to promote its services inside the company's coffee shops. This included up to 500 Starbucks locations to host drop-boxes in-store for video returns. Kozmo.com ended its deal in March 2001 after paying out $15 million (~$25.3 million in 2024). In July 2000, at the height of its business, the company operated in Atlanta, Chicago, Houston, San Francisco, Seattle, Portland, Boston, New York, Washington, D.C., San Diego, and Los Angeles. Kozmo filed an IPO with Credit Suisse First Boston, but never went public.
The company was the subject of an April 2000 report by MSNBC.com reporters Brock N. Meeks and Elliot Zaret claiming that Kozmo was redlining sections of the cities it served that were populated primarily by African Americans. Kozmo denied that race played any part in its decision on what zip codes to deliver to, saying it chose market areas based primarily on Internet penetration rates. The Equal Rights Center (ERC), the Washington, DC–based civil rights group referenced in the article, pursued the company about the allegations. Later in the year, the ERC announced a joint initiative with Kozmo and stated that "Kozmo's initial service area was not motivated by racial discrimination," and Kozmo committed $125,000 toward increased Internet availability for underserved communities.
While popular with college students and young professionals, the company failed soon after the burst of the dot-com bubble, laying off its staff of 1,100 employees and shutting down in April 2001. Employees at many of the company's 18 locations found out about the shutdown only after arriving to work their scheduled shifts and finding the doors locked. Those locations, as well as their Memphis distribution center, were soon liquidated by a veteran entertainment wholesaler from Florida.
From Wikipedia’s article on Kozmo.com, shared under CC BY-SA 4.0.4