Voly cuts operations as startup grocery delivery sector struggles

“[Co-founders] Mark and Thibault had been very open with us the previous Friday,” the staff member said. “They said, ‘The changing startup landscape is making fundraising difficult, we’ll meet with investors on Tuesday, let them know how it goes.’ And then on Wednesday they released us all.”

The staff member said they knew the startups could quickly shift south, but he was “disappointed” because Voly’s two founders had previously said the company had enough cash to last until next February. The couple were good people, “super inspiring” and had put together a talented and college team, but they needed mentoring, the source said.

Store managers didn’t get as much notice, the staff member said, with one leaving scathing comments on an online review site.

Of the three companies that launched last year hoping to conquer Australia's grocery market, Send collapsed and Voly made big cutbacks.  Milkrun founder Dany Milham declined to comment.

Of the three companies that launched last year hoping to conquer Australia’s grocery market, Send collapsed and Voly made big cutbacks. Milkrun founder Dany Milham declined to comment.Credit:Composer: Monique Westerman

The company’s Crows Nest, Manly, Maroubra and Alexandria stores have closed, the former staffer said, leaving just three or four stores in the city and surrounding suburbs, while a planned expansion to Melbourne appears to have been shelved. Delivery times have been extended up to 20 minutes, but Voly is still working.

Its bigger and better-funded rival, Milkrun, is run by serial entrepreneur Dany Milham, who did not respond to requests for comment. in a Australian Financial Review In an article published last month calling Milkrun an “overnight success,” Milham insisted his company would be bigger than Coles in a decade and said it had better margins than people assumed because of to its efficient staff and range of products.

On the other hand, Milham has rejected comparisons with other companies in the sector, and there are those in the industry who think that Milkrun could benefit from reducing its competition. Send, the third startup to enter the market last year, collapsed in early May. He had tried to sell himself to Milkrun and Voly before failing, the sources said.

Milkrun founder Dany Milham believed his new company would grow much faster than his previous startup, mattress and home goods company Koala.

Milkrun founder Dany Milham believed his new company would grow much faster than his previous startup, mattress and home goods company Koala.Credit:joseph robenstone

It’s not uncommon for start-ups to fail, which the industry sees as a price worth paying for ambitious people trying to create value for investors, new jobs and new experiences for customers. Numerous venture capitalists have previously said Sydney’s morning herald Y Age they still have funds to invest in good companies.

But industry insiders have long been skeptical that any local player will become profitable in the long run in the instant grocery delivery sector, which lures customers with cheap prices and super-fast service.

Charging

This is because the startups faced high leasing costs by locating stores in densely populated urban areas, guaranteeing staff full industry minimum wages unlike competing delivery services like Uber and DoorDash, and lacking the economies of scale enjoyed by supermarket giants like Coles, Woolworths and Aldi. .

A European company called Gorillas, which has served as a model for local startups, has been cutting staff and curtailing expansion plans while holding secret talks with rivals about a sale or merger, according to a recent report by Bloomberg. Last year, the company raised nearly $1 billion at a valuation of around $3 billion, but now it’s struggling to raise money as investors begin to doubt the industry’s profitability. US rival Gopuff also laid off hundreds of employees earlier this year.

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