New York City delivery startup WunWun is on the block

New York City-based delivery startup WunWun is looking for a buyer, but a source with knowledge of the discussions tells Business Insider that it hasn't yet signed a deal with the on-demand home service Alfred, as TechCrunch reported last night. Several buyers are being considered.

WunWun, which launched in 2013, had an unusual business model for an on-demand delivery startup: Its deliveries were completely free. Instead of paying a fee with competitors Instacart of Postmates, users would simply pay for the cost of the item they ordered.

WunWun would make money by partnering with merchants, who could pay to have their products appear when users searched for something they wanted to order.

"Our business model is sort of like magic and not a secret," CEO Lee Hnetinka told Business Insider last year. "It's very much like Google. When you type into Google 'Yankee hat' it brings up organic results and people can bid on it to show their result."

Based on WunWun's impending sale, the model didn't pan out how the company expected.

It's an extremely competitive time for on-demand delivery. Besides startups like Postmates, Instacart, and WunWun, big players like Google, with Shopping Express, and Amazon, with AmazonFresh and Prime Now, are also experimenting with same-day delivery.

Business Insider reached out to both WunWun and Alfred for comment and will update if we hear back. Alfred has raised $12.5 million and won TechCrunch Disrupt, the site's startup contest, last fall.