Munchery’s Three Babes Pie Bill Was (Unexpectedly) Paid On Christmas Eve

“It’s a Christmas miracle,” Lenore Estrada tells Eater SF. Though she’s laughing, it seems like the co-founder of Three Babes Bakeshop isn’t completely joking. That’s because on Christmas Eve, she got the last thing she expected: A check for $18,044.44, from an anonymous benefactor who wrote that it was a “gift” to cover some of the losses her business suffered when meal delivery service Munchery folded without paying all of its bills.

The tale is well documented: Munchery, a SF-based meal delivery startup that once enjoyed a valuation of $300 million and $125 million of venture capital funding, abruptly shuttered last January. It subsequently filed for bankruptcy, and court documents revealed the depth of its debt, including $5.3 million in senior secured debt, $22 million owed to second-tier investors, $3 million more to customers with now-useless gift cards, and $3 million to unsecured creditors. That last figure included about $50,000 Estrada said was owed to small businesses like Three Babes, which at the time of Munchery’s shuttering hadn’t been paid since before Thanksgiving, 2018.

Speaking with Eater SF earlier this month, Estrada said that she hadn’t heard a word from Munchery since the closure, despite an open letter to investors informing them of the $20,000 or so the company still owed. When asked if she expected to get paid, she just laughed. “I wouldn’t bet on it,” she said.

If she had, she’d have even more than the $18K that was delivered via UPS to Three Babes at 4 p.m. on Christmas Eve. Along with the check was a letter (it’s included in full below), that thanks her both for the faith she put in Munchery and for the courage “it took to speak up and share the pain you suffered through the shutdown.”

Though Estrada says the letter was sent anonymously, she believes the money came from “Munchery investors and the Munchery management team.” Perhaps, since it was the end of the year, some of the remaining Munchery stakeholders “were able to understand what money they had and what money was left over,” Estrada said. Whatever the case, “I appreciate that Munchery’s investors and leadership team stepped up and made things right by sending us a check.”

The money couldn’t have come at a better time, Estrada said, as with the losses the company suffered due to the Munchery shutdown, Three Babes ended 2019 at a loss (“a little less than what Munchery owed us,” she says) and Estrada was worried about covering employee Christmas bonuses.

Now, she says, she’s ready to move on. “Small businesses and technology companies both, fundamentally, exist to build something positive for the community...I think it’s important for us to work together and support each other to build a system in which everyone can flourish.” In that spirit, she says that she “would love to invite Munchery’s former execs and investors to our launch party when we open our new spot,” a storefront at 2797 16th Street that Estrada says should be set to open in March of 2020.

Lenore Estrada

• Munchery Never Paid Its Three Babes Pie Bill [ESF]
• Three Babes Will Bring Its Salty Honey-Walnut Pies to the Mission [ESF]