Amazon put its money behind a Seattle-area startup that promised to bring milk, bread and bananas to your door. HomeGrocer took orders on the web, picked them in its own warehouses and drove them out in its own trucks, inside a window the customer chose. In March 2000 it sold stock at $12 a share, raising about $288 million. Its bigger rival Webvan was already public, and investors were betting that online grocery would be the next giant market.

A Warehouse Instead of a Store

Terry Drayton started HomeGrocer in Kirkland, Washington, in 1997 with a small group of cofounders. The idea was to skip the supermarket. A single warehouse could serve a whole metro area, and drivers could carry the bags all the way to the kitchen. HomeGrocer opened in Seattle and then moved into Portland, Southern California and other western cities. Each new city needed its own warehouse and fleet, and each one cost tens of millions of dollars before it earned a cent.

Swallowed by Webvan

HomeGrocer listed on Nasdaq in March 2000, days before the dot-com market began to crack. Three months later Webvan agreed to buy it in an all-stock deal valued at about $1.2 billion, and stockholders approved it that September. The combined company kept the Webvan name. It was still burning cash faster than it could raise it. Webvan shut down and filed for bankruptcy in July 2001.

Cover: A Fruit Market, from The Houghton Gallery, Richard Earlom. Art Institute of Chicago, public domain. Chosen for a fruit market (groceries).