Webvan’s Demise May Mean HomeGrocer’s Rebirth

NEW YORK — Terry Drayton, who in 1998 helped launch online grocery delivery service HomeGrocer.com, said he is considering revitalizing the brand now that Webvan is going under. “I certainly will talk to some of the key investors and shareholders and test the waters,” said Drayton, who left the Seattle-based company just before it was sold to Webvan last June in a $1.2 billion stock deal.

Drayton, who now works at Seattle Internet consulting company Ramp Ventures with 20 other ex-HomeGrocer employees, feels it would take between $10 million and $15 million to build a profitable online grocery operation in the Seattle and Portland regions, where HomeGrocer once thrived. Supermarket chain Albertson’s currently is expanding its online service in the area. “We were well on track to profitability,” says Drayton. “But we were playing this game, get all this money, go this fast.”

At one time, the company operated in nine cities and listed as major investors Amazon.com and The Barksdale Group, founded by Jim Barksdale after he had sold Netscape to AOL. Drayton admits that the attitude among capital investors regarding e-commerce companies is, to say the least, much more cautious these days than it has been in previous years. “That’s a big hurdle. But there is still opportunity to create an online grocery store in the Pacific Northwest.”