Milkrun to Close Doors, All Staff Made Redundant

wetsandwich on 11/04/2023 - 14:26
Last edited 11/04/2023 - 15:09 by 1 other user

Sorry for paywall article, I'm not down with the crazy kids and their bypassing of those.

MilkRun to close doors, all staff made redundant

Ultrafast delivery company MilkRun will close its doors and make all staff and riders redundant, marking an abrupt end for the company which raised one of the biggest early-stage rounds in Australian venture capital history.

The company’s founder, Dany Milham, told staff MilkRun would be shutting down by the end of the week, blaming worsening economic conditions, in an email seen by this masthead on Tuesday.

Interesting as they never seemed viable, having to compete with UberEATS and supermarket delivery services. I used them a few times for the discount codes, but it never seemed worth paying full inflated price + all the delivery fees just to have things in 10 mins.

Food & Grocery

Related Stores

MILKRUN (Powered by Woolworths)
MILKRUN (Powered by Woolworths)

Comments

    • wetsandwich on 11/04/2023 - 14:31
      +63

      Same as any other post, to discuss things…?

        • cookie2 on 11/04/2023 - 22:51
          +16

          They actually did pose and opinion based on previous use Re viability. You don't see that?
          Anyway I could say the same for you 'what is the purpose of your posted comment? You gave no opinion on the product yourself.

          • elieb on 12/04/2023 - 03:16
            +9

            @cookie2: That part of the OP was added in after kajke made their comment.

          • [Deactivated] on 12/04/2023 - 10:14
            +4

            @cookie2: You should have checked the revisions before commenting.

            My comments were my opinion on the initial iteration of the OP.

        • Nillionaire on 12/04/2023 - 12:05
          +2

          Have you never used Reddit? The largest discussion generator doesn't require you to post your opinion or ask a question before sharing a post for people to discuss or comment on if they want to.

          • [Deactivated] on 12/04/2023 - 12:34
            -1

            @Nillionaire: I've read stuff on Reddit only when it comes up as part of an online search but don't go on there otherwise and would never have an account as it definitely doesn't give the best of the internet in one place.

            Thanks for explaining why accounts on here post & don't respond.

  • Unorthodox on 11/04/2023 - 14:31
    +15

    As expected, they were very desperate to be bought out by one of the grocery giants or UberEats etc

    Anyone could have seen they were not sustainable and throwing VC money into trying to get numbers up but at the cost of blowing up customer acquisition costs and return customers

    • wetsandwich on 11/04/2023 - 14:34
      +12

      Seems to have been the main business model in the last few years of free money though. Offer something unsustainably loss-making, gloat about the number of users, and hope someone takes it over for 8-9 figures before they do their maths calculations.

      No one fell for it this time because if it was even profitable at any point, coles, woolies, or ubereats could immediately replicate it cheaper.

      • first in line on 11/04/2023 - 15:14
        +2

        Just out of interest what were some of these business that you alluded to?

        • wetsandwich on 11/04/2023 - 15:39

          Afterpay would be a good example

          • garygaz on 12/04/2023 - 18:31

            @wetsandwich: Disagree. It was the exception to the rule. I looked at the stock for work and its customer acquisition costs in the first few years were in the single dollar levels. Afterpay customers were profitable on a year one average spend minus acquired cost whereas it seems large swaths of milk runs users were not

          • derrida derider on 13/04/2023 - 13:36

            @wetsandwich: Yes, but Afterpay only worked initially because of ultra-low interest rates. From the VC funder's POV it was all about perfect timing to take advantage of free money.

            They charge very low merchant fees - much lower than the greedy and slow banks and finance companies would charge small business for short term credit. They could do that because the cost of working capital to carry the credit was effectively zero. With interest rates at more normal levels (though they're still low by historic standards, and will probably remain so worldwide - but that's a long and rather unhappy story) they would have had a much harder time establishing themselves.

        • SydStrand on 11/04/2023 - 20:52
          +3

          Deliveroo was permanently operating at a loss. Only reason people here ever used it was the promo credits which they printed out to chase market share.

    • coffeeinmyveins on 11/04/2023 - 21:29
      +8

      MilkRun: Please buy us
      Woolies: lol no, here's Metro60

    • frewer on 12/04/2023 - 10:29
      +3

      I can read it, here

      Jackie Vullinghs, a partner at AirTree, said MilkRun’s closure was a victim of a changing appetite from venture capital investors but defended MilkRun’s ambitious revenue targets.
      In one of MilkRun’s pitch decks, the company was touting revenue targets that would amount to 20 per cent of Australia’s $24 billion a year online grocery market; a target of around $4.8 billion in annual revenue.
      “We knew the business wouldn’t be profitable from day one and would require material scale to achieve profitability,”
      Milkrun was losing as much as $13 an order in some suburbs and was spending around $57 a head to sign up new customers.

      ''One trash = another treasure'' https://www.afr.com/street-talk/wasting-no-time-our-cow-want…

      The company is cashed up, having raised $2 million last month. Our Cow generates some $20 million in annual recurring revenue and was valued at $60 million in March.
      Our Cow, at the weekend, snapped up the 10,000-person database of Brisbane Valley Farm Direct, an online butchery business in Queensland. It also acquired a database containing Voly’s 43,000 nationwide customers when the MilkRun competitor folded late last year.

  • Guybrush57 on 11/04/2023 - 14:33
    +22

    Never heard of them

    • Antikythera on 11/04/2023 - 22:31
      +4

      i heard of them for the first time today….was on a new applicants resume….now i understand why,

    • Nillionaire on 12/04/2023 - 12:09

      In NSW they only operated in the north shore and eastern sydney

  • jv on 11/04/2023 - 14:37
    -6

    What is Milkrun ?

    • Karl Pilkington on 11/04/2023 - 14:39
      +25

      It probably took you longer to bold format this text post than it would have to just Google 'Milkrun'

      • rumblytangara on 11/04/2023 - 14:49
        +7

        Thought it was a milk delivery company, tbh.

      • jv on 11/04/2023 - 15:04
        +19

        It probably took you longer to bold format this text post

        Not if you have a premium OzBargain account.

    • wetsandwich on 11/04/2023 - 14:39
      +4

      Surprised many people here haven't heard of them since they had coupon codes and an app, the bare essentials of OzBargain territory.

      Like ubereats for groceries, initially they delivered in literally 5-8 mins but that later blew out to 45mins when they tried to cut costs.

      The prices of the goods were fairly competitive, but the service fees killed it completely near the end.

      Basically a product that was only popular because it was unsustainable.

      • Stopback on 11/04/2023 - 14:43
        +4

        People need dinner and meals and will pay for the convience.

        People however are fine to wait a day from groceries.

      • corvusman on 11/04/2023 - 15:24
        +3

        Also available in a very limited number of areas, not even covering the entire eastern beaches or going out of Sydney CBD.
        Absolutely stupid business model.

      • coffeeinmyveins on 11/04/2023 - 21:30
        +1

        jv has most certainly heard of MilkRun, they just (in typical jv fashion) had nothing to actually contribute to the conversation so go with whatever comes to their head first, in this case we get what we see here.

      • Antikythera on 11/04/2023 - 22:32
        +1

        ubereats is the ubereats for groceries though.

      • Nillionaire on 12/04/2023 - 12:10

        ubereats for groceries

        But UberEats does do groceries..?

        • Chmmr on 12/04/2023 - 17:30

          Probably why Milkrun isn't doing the milkruns anymore.

    • Educatedfool on 11/04/2023 - 20:33
      +1

      milk money and run :)

  • Seraphin7 on 11/04/2023 - 14:42
    +7

    Yet another example of consumers realising there is very little value in paying extra to get things delivered to your door just to save you getting off your dot for half an hour.

    • afoveht on 11/04/2023 - 16:11
      +3

      I'll pay extra to have things delivered - but only up to approx $15/month like woolies charges, and generally to get discounted products that offset the delivery. Fantastic value IMO.

      • Seraphin7 on 11/04/2023 - 17:03
        +2

        Yes, those sorts of things I agree with … but the idea that people pay above the normal price, plus a delivery and/or service charge, in anything other than edge cases is just insane IMHO.

        • afoveht on 11/04/2023 - 18:10
          +7

          I can understand exceptions (drunk 😵‍💫, hot date requires uninterrupted continuity 🤠, fell off the ladder and can't move* 🤕, etc.) but yeah, as a regular thing… hell no.

          (* Added that last one otherwise it was beginning to look like it's only for pure hedonism.)

          • meong on 11/04/2023 - 23:26
            +1

            @afoveht: Broke my hand in 2020 which happened to coincide with these delivery apps introducing discounts all over the place and yeah it was definitely useful!

          • Grazz989 on 12/04/2023 - 16:51

            @afoveht: Fell off the ladder due to climbing up it with the date while drunk = Gonna need lots of deliveries ;)

    • Nillionaire on 12/04/2023 - 12:25

      That's not what happened. People are more familiar with and prefer all the other services that offer the same thing. UberEats, DoorDash, Menulog,Woolies Metro60, Coles Plus, Amazon Prime.

    • Nillionaire on 12/04/2023 - 12:26
      -1

      We don't all have cars buddy

      • Ciderfizz44 on 13/04/2023 - 14:46

        I'm not your buddy guy!

  • Muzeeb on 11/04/2023 - 14:43
    +16

    Sorry for paywall article, I'm not down with the crazy kids and their bypassing of those.

    Paywall removed link

  • [Deactivated] on 11/04/2023 - 14:43
    +7

    These kinds of companies never make a profit. They always hope that people will keep investing in the idea until a competitor buys them out. Many of them run out of money first. Nothing to see here.

  • CyberMurning on 11/04/2023 - 14:43
    +1

    we should have grab company coming to australia
    https://en.wikipedia.org/wiki/Grab_(company)

    • jleno on 11/04/2023 - 14:50
      +4

      cost of labour, cost of running a business and huge red tape / regulations makes many businesses, especially ones like these, unsustainable in Australia.

      • Jimothy Wongingtons on 11/04/2023 - 14:52
        +2

        i could only see something like this working in extremely dense areas of population eg Hong Kong, where labour would be cheap, pleantiful and everyone could get around on bike/scooter.

        • wetsandwich on 11/04/2023 - 15:00
          +8

          It's great in Thailand where your meal is $2 and delivery is $1.

          But try adding 50% or more to a meal price here for delivery. That's why uber / menulog etc suck. $35 all up for a burger and fries when I looked up my favourite burger shop that's about $14 in person.. and they're somehow still losing money while underpaying the delivery driver.

    • Horacio on 11/04/2023 - 20:42
      +3

      afaik Grab & Gojek both burning through venture capital & miles away from turning a profit

  • Jimothy Wongingtons on 11/04/2023 - 14:51
    +1
    1. never heard of this mob until today
    2. quick google…so basically they thought hey - me too! to the extremely limited and already well serviced convivence delivery industry…

    WHAT WERE THEY THINKING????!!!

  • AustriaBargain on 11/04/2023 - 14:52

    Uber Eats can charge so much because what they are doing isn't easy. Amazon can charge so little because they made what they do look easy. If uber Eats can keep their dominant position then they will rolling in money when we have self driving cars because every shop and restaurant will already be plugged into their system. Everyone will be ordering stuff every day of the week, there will be more self driving delivery cars on the road than cars with people commuting.

    • Stopback on 11/04/2023 - 14:53
      +1

      uber eats is a information collecting company, they must have so much great data on what people eat etc,

    • CrowReally on 11/04/2023 - 14:57
      +9

      expecting self riding cars to be "just around the corner" is like expecting Uber to start making profits "any day now".

      (yes, I'm aware the technology fairy that makes self driving cars commonplace is the same money fairy that Uber is awaiting)

      • AustriaBargain on 11/04/2023 - 15:00

        There's too much money to be made for it not to be just around the corner. I bet within 10 years we'll have it.

        • CrowReally on 11/04/2023 - 15:07
          +8

          Oh, the old "wishful thinking makes things happen" investment strategy. Imagine how much the cure for cancer's going to make when it drops next year!

          • AustriaBargain on 11/04/2023 - 15:09

            @CrowReally: We already have gene therapy, which was science fiction when I studied biology as a lad. We have AI that can pass the Turing test. We have cars that can technically self drive. The future is now.

            • CrowReally on 11/04/2023 - 15:17
              +1

              @AustriaBargain:

              The future is now

              I dare you to go jogging in a black shirt that has a white line down the middle of it on a self-driving car circuit if you're so confident in that tech.

    • coffeeinmyveins on 11/04/2023 - 21:31
      +3

      People think this is good but it isn't. We are very quickly headed to a dystopian nightmare where everything is owned by a few companies. Hell, it mostly already is.

      • whyisave on 12/04/2023 - 00:15
        +1

        Blackrock

        • iCandy on 12/04/2023 - 07:46

          Vanguard

    • whatgift on 11/04/2023 - 21:34

      My understanding is that Uber has never made a profit, and I wonder how they will remain sustainable?

      • love2buy on 12/04/2023 - 05:43

        Just imagine uber going out of business. Half the population of Sydney would be out of a job. It's too big to fail.

  • Tee Rex Arms on 11/04/2023 - 15:12
    +4

    Never heard of them

    • first in line on 11/04/2023 - 15:16
      -5

      I have. What's your point?

  • stemcell on 11/04/2023 - 15:21

    Attention seeking I guess

  • bdl on 11/04/2023 - 15:23
    +7

    Milkran

  • Fergy1987 on 11/04/2023 - 15:27

    who

  • scotty on 11/04/2023 - 15:34
    +2

    Predicted last November. Most "startup" competitors like Voly and Send App have died as well. Well, investors' money in the drain.

    • Muzeeb on 11/04/2023 - 15:37
      +1

      Found the alt account for Nostradamus.

    • machej on 13/04/2023 - 02:54

      In fairness I predicted it earlier than that after I got a squiz of the unit economics but it's nice to know you are stalking me. ;)

  • DaTa on 11/04/2023 - 15:39

    Called this week's ago, support even said we are still alive, yet no riders every day of the week lol

    • Wiadro on 11/04/2023 - 19:45

      have they ever had riders, id drive past the Milkrun shopfront in surry hills and it had heaps of bike in front and no one to ride them

  • jetblack on 11/04/2023 - 16:19
    +4

    I'm keen to know; how can I purchase an ex-Milkrun bike on the cheap?

  • hasher22 on 11/04/2023 - 19:29

    I heard of them when they started up and I thought to myself "this is just crazy, groceries under 10 minutes!!??"

    Receiving the order > picking > packing > delivering under 10 minutes is crazy to me. Even if it's just 1 item, under 10 minutes is just too fast IMO.

    I am not surprised they went under, the expectations is too high instantly.

    • zeoko on 11/04/2023 - 20:32

      I have experienced this in India. Companies like Swiggy deliver groceries in 15 min. Less than 2 min if their warehouse is near by. We had the delivery boys deliver good whole day sometimes, just 1-2 items each time. It was like if you start cooking and realize some ingredients is missing, just order and they would be home before you know it. It was great for those who would return home tired and didn't have time to go grocery shopping.

      • hasher22 on 11/04/2023 - 20:35

        Got ya!

        I can see this working in populated, dense areas such as India, Philippines etc…… Also wages and abundant staff helps(?)

        But in Australia, don't see it working at all, maybe in the future where air drone delivery is popular and more fine tuned…..

        • zeoko on 11/04/2023 - 21:23
          +2

          Yes. Australian market conditions and lifestyle doesn't need this rapid delivery system. We are happy to drive to the grocery shops.

  • Ghost47 on 11/04/2023 - 19:52
    +1

    Just a symptom of cheap money really.

  • SpicyStew on 11/04/2023 - 20:27
    -2

    who?

  • Surfsalot on 11/04/2023 - 20:36

    Didn’t know you could still get milk delivered

  • Alderson on 11/04/2023 - 21:00

    Guessing people saying "who?" don't live in a big / east coast city? They've been in Sydney since 2021.

    Used them a few times… got my first RAT tests delivered by Milkrun while we were in lockdown, and they also saved my weekend big brekkie one time when I realised I was out of avocados when halfway through cooking. They lived up to the 10-minute delivery promise too, in my experience. But I was only using them in 'emergencies', and probably haven't used them in over 6 months.

    • coffeeinmyveins on 11/04/2023 - 21:32

      "Guessing people saying "who?" don't live in a big / east coast city? They've been in Sydney since 2021."

      Some people also like just being dismissive to anything

      • SpicyStew on 12/04/2023 - 08:57
        -1

        dismissive to people who says who?

      • wetsandwich on 12/04/2023 - 10:37

        But it's so trendy to 'not know' about something that's advertised on every web page, billboard and bus stop ad in the country!

        • rumblytangara on 12/04/2023 - 11:08
          +2

          I've only been here four months, so am a bit out of it. But WFH, mentally tuning out billboard ads, not consuming TV, and running several levels of adblockers really helps to screen out knowledge of useless shite / Web2.5 things like Milkrun.

          • SpicyStew on 12/04/2023 - 16:12

            @rumblytangara: spot on. I have not owned a TV for at least a decade, have no junk sticker on mailbox and tune out of any other advertisements they try to push onto me.
            I've been here since '85

          • Alderson on 13/04/2023 - 22:29

            @rumblytangara: For what it's worth, I do most of those things (and don't even own a TV).. found out about Milkrun the old fashioned way via flyers in my mailbox

    • Forenti on 13/04/2023 - 08:49

      Guessing people saying "who?" don't live in a big / east coast city?

      Brisbane not big by your definition I guess? They never serviced here and as such I had never heard of Milkrun until now

      • trongy on 14/04/2023 - 08:10
        +1

        Even in Sydney and Melbourne, the advertising was likely highly targetted, since they only serviced a small geographical areas. I do live in a service area, but I only found out about them via word of mouth. Until that time, they were just one amongst the many brands of food delivery bike I see in my neighbourhood.

  • Campbellske on 11/04/2023 - 21:24

    Such sad news. Really enjoyed using them even got some great bargains there and always great service.

    Menulog seems to barely have any drivers now and am now forced to use ubereats which i hate supporting

    • coffeeinmyveins on 11/04/2023 - 21:32
      +8

      "forced" to use ubereats?

      come on now…….

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