Started as a YC Companees’ weekend project, Magic, an SMS-based on-demand delivery is raising $12 million in Series A funding led by Sequoia. According to sources, the one month old company is valued at $40 million pre-money. Magic allows users to text for anything as long as it is legal, and it would be delivered at the doorstep.
One shortcoming in the service is that it is dependent on other delivery services, such as Postmates, Eat24, GrubHub, Instacart, etc. for fulfillment. There are no Get Magic delivery people helping the users. Rather, Magic is simply acting as a convenience layer, taking orders, estimating total cost, marking up those orders, and then placing them with any number of existing services.
Almost all on-demand delivery services already charge a delivery fee. That puts Magic in the position of having to add its own markup to every order, meaning Magic users are paying two premiums : the first is for the convenience of using an on-demand service, and the second is for the convenience of doing that via text.