Milkrun is shutting down by the end of the week after struggling to raise more money in the current market.
👉 Background: Milkrun is the speedy grocery delivery company that hit the scene in September 2021 with 10 minute grocery delivery. After rapid, early growth, Milkrun raised $86 million from some of Australia’s leading VC’s and investors across two investment rounds.
👉 What happened: Now, just 15 months after its big capital raise, Milkrun has announced it will shut down by the end of the week after struggling to raise more money in the current market.
👉 What else: After the downfall of competitors like Quicko, Send and Voly - there were ongoing question marks on how Milkrun could make this business actually work... The unit economics just didn’t really stack up.
💡Unit economics is a term used in business to describe the financial performance of a single unit or transaction. For Milkrun, the question would be: are we making money or profiting on each and every delivery to a customer? This needs to take into account the cost of:
💡A leaked investment pitch deck from August last year showed that Milkrun was losing $40 on each order. And then over time, it improved to $13 per order.
💡By understanding the costs and revenue associated with selling one unit of a product or service, it can help a company make strategic business decisions. And sadly for Milkrun and its investors, the business decision was to shut down...
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