Munchery closes after raising $125m, citing rotten revenue numbers

The 8-year-old meal kit delivery startup announced it will close after years of financial struggles in a highly saturated market.

Meal delivery startup Munchery announced it will close its delivery doors after years of issues involving an ever-changing business model, reports of food waste, and massive layoffs.

Munchery closes after raising $125m, citing rotten revenue numbers

A bite out of the bottom line

Founded in 2010, Munchery came out of the kitchen ready to cook, sling, and deliver high-quality meals to consumers. But, despite raising $125m (at a $300m valuation), the company struggled to stay afloat. 

Munchery tried everything to stabilize its revenue: It partnered with celebrity restaurateurs to add meal kits to its menu, brought in a subscription model — it even opened a shop inside a San Francisco BART station to win over the commuter crowd. 

But the company couldn’t get out of the weeds. Last year, it closed in all cities except San Francisco, laying off 30% of its workforce (257 employees).

The meal kit biz ain’t as tasty as it looks

Meal kit startups like Plated and Home Chef have kept their ovens on by selling to large grocers, but many Munchery competitors like SpoonRocket, Sprig, Chef’d, Maple, and Ando have all met their bitter end.

And the ones sticking around aren’t exactly appetizing for investors: Blue Apron, which went public in 2017, is currently trading at $1.40 per share.

With difficult margins, towering logistical and shipping costs, and an oversaturated market, the meal kit delivery model may have been best left in the fridge.

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