Instant delivery startup Milkrun unsuccessfully sought new investment on two occasions in 2022, The Australian reports, suggesting the sector is struggling to adapt with a rapidly changing economic environment.
Milkrun secured a spectacular $75 million Series A injection in January 2022, as Tiger Global, AirTree Ventures, Skip Capital, and Mike and Annie Cannon-Brookes’ Grok Ventures sought to crown the leader of Australia’s burgeoning instant delivery scene.
But in an exclusive report, The Australian claims an updated pitch deck circulated by Milkrun last year failed to attract further Series B investment in the year-old company.
That reticence was backdropped by significant operating costs at Milkrun, which eschews the independent contractor model and uses employees to deliver groceries.
The cost of those drop-offs also led Milkrun to abandon its promise of 10-minute deliveries in June.
At the same time, the return of in-person shopping after Covid-19 restrictions bit into the sector’s lockdown-era market share.
In a statement, co-founder Dany Milham disputed elements of The Australian‘s report, and claimed its pitch deck details were revealed in the media in 2022.
“The pitch deck was from April 2022 and was already leaked by SMH in June last year,” Milham said.
Elsewhere, challengers without Milkrun’s impressive capital reserves fared poorly through 2022.
Voly, SEND, and Quicko are no longer, after operating expenses collided with rising input costs and a lack of investor appetite.
Milkrun contemplated targeted partnerships with grocery giants like Coles and Woolworths in 2022, the Nine papers reported last year.
Such plans could be hampered by the existence of Woolworths’ existing Metro60 offering, in which the supermarket chain uses Uber services to deliver groceries within a 60-minute window.
Regardless, Milkrun has taken strides to build out its business model in recent months: in December, it added a next-day market delivery service, adding gourmet providers to its inventory.
Yet that kind of addition is unlikely to sway industry onlookers like entrepreneur and author Ian Whitworth, who wrote in SmartCompany in June that Milkrun appears to have “cherry-picked all the worst, hardest, and most expensive elements of running a business”.
The story was originally published on Smart Company.
