On-Demand Delivery Service Munchery Ceases Operations

Munchery, the on-demand delivery startup that raised $125 million in venture funding, has shut down the service effective immediately.

Reports citing an email Munchery sent to customers Monday (January 21) said the shutdown isn’t too surprising given in May it was forced to lay off 257 employees, which amounted to 30 percent of its workforce. That came after it shut down service in Seattle, Los Angels, and New York. In May Munchery said it was planning to focus on its largest market, which was San Francisco, in an effort to become profitable.  That never happened, prompting its action earlier this week.

“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 the e-mail announcement, according to reports. “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.”

Munchery came on the scene in 2010 and hit a valuation of $300 million in 2015 after raising $87 million in a venture funding round. Its venture capital investors included Greycroft, ACME Ventures (formerly known as Sherpa Capital), Menlo Ventures, e.Ventures, Cota Capital, M13 and others, noted reports. The company has struggled for years to master on-demand delivery of food. It tried several iterations to grow the business, but none of them took off. It also faced reports that it wasted on average 16 percent of the food, laid off employees and used up the lion’s share of the funding it raised.  It is just the latest in a string of food delivery startups that have shut down, according to reports which pointed to Sprig, Maple, Doughbies, and Josephine as a few examples of others that weren’t able to succeed.