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San Francisco-based meal delivery service Munchery is shutting down operations entirely and laying off hundreds of local workers immediately. It’s the latest — and the last — piece of bad news for the nine-year-old startup, which once raised more than $125 million in funding at a $300 million valuation, expanding to markets like New York, Los Angeles, and Seattle before contracting to just its original market of the Bay Area in spring 2018.
Munchery broke the news of its closure to customers yesterday via email. “Today, with a heavy heart, we’re reaching out to announce that Munchery is closing its doors and ending operations effective immediately,” the company wrote in an announcement shared with Eater SF. “Any outstanding orders with Munchery will be canceled and refunded.”
While Munchery tinkered with several food delivery ideas during its tenure, its final product was simple: The company sold meal kits and pre-made meals at breakfast, lunch, and dinner, with prices that ranged from about $9 to $14 per meal. An option for monthly or yearly membership subscriptions ($9 and $85, respectively) allowed members to buy meals for 20 percent off.
At one point, in 2016, Munchery produced many more meals than its customers purchased, losing as much as $5 million a month in unsold meals that year according to Bloomberg. In 2017, after opening branches in LA, New York, and Seattle, with funds from backers like Menlo Ventures and Sherpa Capital, the startup pulled back to focus solely on San Francisco, laying off 30 percent of its workers, or 250 people.
Munchery is only the most recent meal delivery startup service to go belly up in an apparently challenging marketplace. Sprig, another Bay Area born delivery meal company, which also expanded to new cities with millions in funding only to contract back to the Bay Area, closed in 2017. Others, such as Spoonrocket and Bento, have also closed.
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