On-demand food delivery startup Munchery is ceasing operations effective immediately, the startup announced in an e-mail to customers on Monday.
Founded in 2010, the San Francisco-based business had raised a total of $125 million in venture capital funding, reaching a valuation of $300 million with an $87 million round in 2015, according to PitchBook. Munchery was backed by Greycroft, ACME Ventures (formerly known as Sherpa Capital), Menlo Ventures, e.Ventures, Cota Capital, M13 and more.
“Since 2010, we have been committed to bringing fresh, local, and delicious meals into your homes along with all our customers across the country,” the company wrote in today’s e-mail announcement. “We’ve been delighted to work with world-renowned chefs, experiment with diverse and unique ingredients and recipes, and be a part of your holiday feasts and traditions. We have also enjoyed giving back to our community through meal donations, volunteer service, and so much more.”
The news comes as little surprise considering Munchery laid off 257 employees, or 30 percent of its workforce, in May after shutting down its Seattle, Los Angeles and New York operations. At the time, the company said it planned to double down on its biggest market, San Francisco, which would help it “achieve profitability in the near term, and build a long-term, sustainable business.”
Munchery is just the latest in a line of food delivery startups to shutter. Doughbies, an on-demand cookie delivery business, closed its doors in 2018. Sprig, Maple and Josephine are amongst the others to falter under the pressure of a crowded market.
Munchery Inc. was an online food ordering and meal delivery service that served parts of San Francisco, Seattle, and New York City. The company shut down abruptly on January 21, 2019. It was valued at $300 million. The website currently relaunched as a recipes-only website.
“Since 2010, we have been committed to bringing fresh, local, and delicious meals into your homes along with all our customers across the country,” the company wrote in today’s e-mail announcement. “We’ve been delighted to work with world-renowned chefs, experiment with diverse and unique ingredients and recipes, and be a part of your holiday feasts and traditions. We have also enjoyed giving back to our community through meal donations, volunteer service, and so much more.”
Founded in 2010, the San Francisco-based business had raised a total of $125 million in venture capital funding, reaching a valuation of $300 million with an $87 million round in 2015, according to PitchBook. Munchery was backed by Greycroft, ACME Ventures (formerly known as Sherpa Capital), Menlo Ventures, e.Ventures, Cota Capital, M13 and more.
On-demand food delivery startup Munchery is ceasing operations effective immediately, the startup announced in an e-mail to customers on Monday.
The news comes as little surprise considering Munchery laid off 257 employees, or 30 percent of its workforce, in May after shutting down its Seattle, Los Angeles and New York operations. At the time, the company said it planned to double down on its biggest market, San Francisco, which would help it “achieve profitability in the near term, and build a long-term, sustainable business.”
Munchery is just the latest in a line of food delivery startups to shutter. Doughbies, an on-demand cookie delivery business, closed its doors in 2018. Sprig, Maple and Josephine are amongst the others to falter under the pressure of a crowded market.
Back in 2010, Munchery co-founders Tri Tran and Conrad Chu came up with a seemingly brilliant idea in Munchery. Hiring a team of gourmet chefs that would cook up a variety of uniquely crafted, continually changing menus, Munchery allowed users to order this food and have it delivered straight to their doorstep. Customers would then be able to rate the food and the chefs according to their satisfaction. This idea of gourmet meals on-demand allowed the company to raise its most recent $125 million in total funding and was speculated to be valued at $300 million at its peak.
Pascal Rigo, a celebrated chef who at one point served as Muncheryâs Chief Customer Experience Officer, stated in his interview with the San Francisco Chronicle that â[startups] can be either a good food company or a good delivery company, but I donât think anyone has been able to do both.â He left the company in 2015, after just 5 months of joining. Muncheryâs attempt to juggle both of these titles led to difficulties at scale.
Another area where Munchery failed was in acquiring new customers. They attempted to use aggressive discounts to achieve success in this sector, offering things like $20 off a userâs first two orders and subscription plans that offered a free 1-month subscription to first-time customers. However, despite these efforts, Munchery failed to retain customers in any significant way. These disappointments led to Tri Tran stepping down from the position of CEO, replaced by James Beriker, who employed a slew of layoffs and other belt-tightening measures. Beriker also raised prices, which would only lead to a further downward spiral for the company amidst increasing competition.
Munchery also realized late that its original heat-and-serve meals had geographical constraints, as to ensure quality, food had to be delivered within a short drive of its kitchens. To accommodate for this, Munchery accelerated its expansion, setting up expensive production kitchens in Los Angeles, New York, and Seattle. These proved to be too expensive both financially and logistically, and the new kitchens were shut down by May of 2018. Additionally, new competition from Uberâs Eats spinoff and DoorDash started to kick in and Munchery soon could not match the variety offered by these companies that could source from multiple restaurants.
Munchery had a very interesting growth story. For the first few years, as a San Francisco-based platform for on-demand, microwavable gourmet meals, the business did quite well. Riding on the momentum of early success, in 2015, Munchery, in a bid to outdo its rival Blue Apron, branched into offering ingredients for customers to make their own meals (and providing them the appropriate recipes to do so). The San Fransisco-based startup continued to generate a lot of media buzz and expanded into New York, Seattle, and Los Angeles soon after. They were outperforming Blue Apron and almost every other on-demand food delivery startup, attributed to the convenience their microwavable foods model brought and Muncheryâs pride on the quality control they offered that other on-demand startups, who depended upon restaurants, couldnt. They also prided themselves in sourcing 100% natural ingredients and working efficiently under their schedule-ahead model that constantly optimized the efficiency of their couriers.
Meal Delivery Startup Munchery Shuts Down, Leaves Employees, Customers In Lurch
FAQ
Why did munchery fail?
Where is munchery com located?
Who is the CEO of munchery com?
What happened to Munchery?
James Beriker became CEO, taking the place of co-founder Tri Tran. On October 2, 2020, Rolliyo, Inc., a DE corporation doing business as (“DBA”) Munchery.com, sent an email to Munchery, Inc’s email list announcing that “Munchery is back (as a recipe site).” In late 2018 the company laid off 30 percent of its employees.
How much is Munchery worth?
Munchery was founded in 2010 in San Francisco, California. In 2015 the company raised $85 million in Series C funding and was speculated to be valued at $300 million, though a company spokesperson did not confirm that number.
Why did Munchery sell its San Francisco headquarters?
In May 2019 the bankrupt company sold its 70,000-square-foot South San Francisco headquarters for $5 million. Munchery’s CEO James Beriker planned to pay himself a $250,000 “success fee” for the sale of the company’s headquarters and other assets.
How much does a Munchery membership cost?
A Munchery membership is $6.95/month and customers are billed annually at a price of $83.40. Members save 15 percent on all Munchery items and also have access to special discounts and Munchery merchandise. Munchery Meal Kit customers often gravitate towards the Munchery Plaid Box subscription.