Delivery service Milkrun is shutting up shop and making all of its staff across Syney and Melbourne redundant after struggling with Australia’s economic stresses.
The start-up was launched in September 2021 during the height of the COVID-19 pandemic and offered super fast grocery delivery across Sydney CBD and Melbourne.
Founder Dany Milham, who also co-founded mattress and furniture company Koala, wrote to employees the company would shut up shop by the end of the week due to worsening economic conditions, reported the Australian Financial Review.
“I’m writing to let you know that we have made the difficult decision to wind down the business, and as a result, Milkrun will cease trading this Friday,” Milham said in an email to staff seen by the Australian Financial Review.
“Since we announced our structural changes in February, economic and capital market conditions have continued to deteriorate, and while the business has continued to perform well, we feel strongly that this is the right decision in the current environment.”
Milkrun employs more than 400 people across Sydney and Melbourne including office staff and riders, all of whom will be made redundant.
Milham said in the email to staff the company has a “sufficient cash balance” to pay staff and suppliers out in full.
“We’ve always been committed to doing things the right way, and winding down the business while we still have a sufficient cash balance enables us to ensure our people and suppliers are paid in full,” Milham’s email read.
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Milkrun was one of the first Aussie start-ups to deliver groceries and alcohol superfast, promising it at your door in under 20 minutes for metro-eligible areas.
The company saw a huge venture capital raising of more than $75 million after its launch when the ultrafast delivery model caught the eye of billionaire Atlassian founders Mike Cannon Brookes and Scott Farquhar and a plethora of local firms.
But despite the huge round of cash raising, the company has struggled with Australia’s economic downturn as inflation leads to skyrocketing grocery prices and the once cheap service had to keep up with prices.
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