Munchery shuts down operations in LA, New York and Seattle

Munchery, the on-demand food delivery startup, has shut down its operations in Los Angeles, New York and Seattle, the company announced on its blog today. That entails the teams from those cities are also being let go. In total, 257 people( about 30 percent of workforce) were let go, according to a Munchery spokesperson.

” We recognize the impact this will have on the members of our squad in those regions ,” Munchery CEO James Beriker wrote on the company blog.” Our squads in each city have built their businesses from scratch and ran tirelessly to serve our customers and their communities. I am grateful for their unwavering commitment to Munchery’s mission and success. I truly wish that the outcome would have been different .”

With LA, New York and Seattle off the table, Munchery says it’s going to focus more on its business in San Francisco, its first and larger marketplace. This change in operations will also allow Munchery to” achieve profitability on the near term, and build a long-term, sustainable business .”

The last couple of years for Munchery has not gone are you all right, between scathing reports of the company wasting an average of 16 percentage of the food it makes, laying off 30 the workers and burning through most of the money it raised.

During that time, Munchery tried a number of different strategies. Munchery, which began as a ready-to-heat dinner delivery service, in 2015 started delivering meal recipes and ingredients for people who want to cook. Then, Munchery launched an $8.95 a month subscription plan for people who order several times a month. In late 2016, Munchery opened up a shop inside a San Francisco BART station to try to bring in new business.

But it’s not just Munchery that has struggled. The on-demand food delivery business is tough in general. Over the last couple of years, a number of companies have shuttered due to the now well-known fact that the on-demand business is tough when it is necessary to margins. The most recent casualty was Sprig, which shut down last May, after raising $56.7 million in funding. Other casualties include Maple, Spoonrocket and India’s Ola.

Munchery has raised more than $120 million in capital from Menlo Ventures, Sherpa Capital and others. In March, the company was reportedly trying $15 million in funding to help keep its head above water.

Make sure to visit: CapGeneration.com

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