"... Munchery is closing its doors and ending operations..."
January 31, 2019 1:00 PM   Subscribe

Munchery, a microwave meal and meal-kit delivery company, announced last week that they were shutting down. Well, at least, they announced it to their customer base, but they appear to have forgotten to tell their vendors. Yesterday, their employees filed a class action lawsuit, citing failure to warn of mass layoffs.
posted by hanov3r (14 comments total) 6 users marked this as a favorite
 
I love Lenore Estrada's call that Munchery's investors should step up and pay off the debts owed to other small businesses. The idea has gotten a little pickup, like Luke Waring and Sumit Chachra. Legally they probably aren't obligated, although a case could be made that since the VCs are also board members they have some responsibility. Mostly it'd just be the right and decent thing to do. And Silicon Valley is a small enough town that it might be worth Menlo Ventures and Sherpa Capital to settle the debts, just for the good will. Hahahah, I'm hilarious that would ever happen.
posted by Nelson at 1:17 PM on January 31, 2019 [2 favorites]


Time to name and shame the founders. Their fraud is by design not incompetence.
posted by Foci for Analysis at 1:24 PM on January 31, 2019 [2 favorites]


The confusing thing about Munchery is that I'm not entirely sure they've actually filed for bankruptcy, which means they also don't have any kind of creditor protection. If I were one of their vendors, I would be pressing like crazy to get a quick foreclosure and then go raid their offices for leftover laptops, cubicle panels, and anything else I could eBay.

If you could got there before the bankruptcy or other unsecured creditors, you might make you money back. If not, then you get to stand in line behind employees and banks.
posted by fremen at 1:44 PM on January 31, 2019 [1 favorite]


Three Babes pies look delicious, I'm way interested in their Bittersweet Chocolate Pecan, Blueberry Crumble, The Rich, and Key Lime.

I like the idea of the people who refused to pay off the vendors being held accountable to the extent that anyone who hires them experiences a reduction in credit offered by vendors. Oh sorry, we can't offer you net 30 anymore, you've hired one of the schmucks who stiffed a lot of vendors. We can't extend credit in those circumstances; prepaid orders only.
posted by BrotherCaine at 1:44 PM on January 31, 2019 [3 favorites]


This is a wild story and I know it’s not about this but I’m confused because I was a munchery customer in the Bay Area and pies and baked goods weren’t on the menu. Maybe for a one time thing back in November? I quit in September because the food was dry and bland, and I kept forgetting to make my menu choices so they kept sending the same stuff I didn’t like.
posted by bleep at 1:44 PM on January 31, 2019 [1 favorite]


The names of Munchery's founders are hardly a secret. Conrad Chu and Tri Tran. Tri Tran was a Vietnamese refugee in 1986 and got an M.Eng from MIT. Conrad Chu got his BS from UC Berkeley.

If you want to look to someone to blame, you should probably also look at change in CEO in late 2016. It sounds like things weren't going well and the investors brought in a new CEO to try to fix it. IMHO it's impossible to fix a business that simply is a bad idea.

Is there any evidence any of the problems was "fraud" or "by design"? A random Internet angry person saying "grawr" doesn't count.
posted by Nelson at 1:48 PM on January 31, 2019 [2 favorites]


The confusing thing about Munchery is that I'm not entirely sure they've actually filed for bankruptcy

They apparently haven't, per Lenore Estrada, the co-founder of the delicious local bakery that baked their pies:
He also said they were not in bankruptcy but “might be forced to with all the attention [they] were getting” (which really did feel like a dig aimed at me, but whatever), and that people would be paid in the order in which they were owed money (employees, secured creditors, then unsecured creditors like me and my friends)
They abruptly closed down all operations (I was a customer from time to time; I got an email that everything's shutting down right now), laid everyone off, and think they "might" be forced to go into bankruptcy? Huh?

One group I haven't heard about are their couriers; they had contractors who did the deliveries. Is the company ripping them off too?

A funny thing about this is that near the end, Munchery finally hit on a model that seemed to make a lot of sense: make precooked packaged meals and sell them at places like Amazon's cashier-less (and entirely inaccessible if you don't have a smartphone and a bank card, but that's a different rant for a different thread) Go convenience stores downtown so people can pick them up on their way home from work and have an easy dinner. And yet that's really more the business model of a commissary kitchen or a good grocery store deli than a venture-backed business that investors have poured $120M into, because it's never going to give you the kind of growth VCs demand.
posted by zachlipton at 2:16 PM on January 31, 2019 [1 favorite]


This is really too bad. I was a subscriber with Get Fed in NYC which was forced to shut down when VC-backed Pilotworks pulled a similar maneuver and forced myriad small business owned by woman and minorities to shut down when they lost their facility access. It doesn't look to me like Get Fed is coming back although there's a similarly named meal delivery service in New Zealand that looks amazing:\

If you look at Beriker's Linkedin he really tries to sell himself as the CEO that gets the startup acquired and whether or not that portrayal is accurate it appears he failed in this regard with Munchery.

Right now I'm using a much smaller meal delivery service and it seems like the guy who runs it does so because he'd rather cook than do anything else. He does have a business background so he seems to be profiting in some capacity. Got worried for a sec that he was already VC-backed but thankfully Pitchbook hasn't heard of him yet!
posted by rdnnyc at 2:22 PM on January 31, 2019


Is there any evidence any of the problems was "fraud" or "by design"? A random Internet angry person saying "grawr" doesn't count.

Did you read the article, though? It's by one of their vendors, not a random person. One of her points is that a non-negligent (or fraudulent) company keeps track of its financial situation and ability to pay employees and vendors, and behaves accordingly. A company that knows it's out of money but nonetheless continues to put in large orders with vendors that it knows it will not be able to pay, instead of folding at a point when it can still discharge all its debts, is a company that loads its risk onto others (without their consent) and leaves them holding the bag.

(Not even bothering to notify your employees and vendors ahead of the fact is just an extra and completely gratuitous bit of nastiness. Vendors were continuing to put in their time and money to fulfill orders for a company that was shutting down, because they had no idea.)
posted by trig at 2:27 PM on January 31, 2019 [14 favorites]


"move fast and break things", and the whole worldview that it shorthands, needs to diaf, like yesterday
posted by salt grass at 2:43 PM on January 31, 2019 [5 favorites]


With all the startups spending such huge amounts of money and then abruptly going out of business, Late Capitalism is starting to look a lot like Potlatch capitalism, which Marvin Harris would have had us believe was the earliest capitalism.

Talk about your Ouroboros.
posted by jamjam at 3:17 PM on January 31, 2019


Three Babes pies look delicious

Three Babes pies are spectacular. I never thought spending $40 on a pie would be a good idea, but they're worth every penny. (Salty honey walnut is my favorite.)
posted by asterix at 4:31 PM on January 31, 2019 [2 favorites]


"move fast and break things", and the whole worldview that it shorthands, needs to diaf, like yesterday

You have no idea...

Cooking by proxy startups are chump change; I can barely cook up outrage. The number of fintech and healthtech startups I have dealt with who look at me with a straight face and have zero issues endangering peoples money and health with the "move fast and break things" mantra destroys any hope I have for humanity. I can't tell you the number of times I've been told "we'll worry about security/privacy/ethics when we close our series-A".
posted by kjs3 at 7:51 PM on January 31, 2019 [5 favorites]


One group I haven't heard about are their couriers; they had contractors who did the deliveries. Is the company ripping them off too?


For a long while, Munchery was one of the few SF food-delivery businesses that actually paid couriers as employees, which made them a million times better and more ethical than Postmates, Uber Eats, even TCB. No idea if that changed, but just wanted to mention it.
posted by migrantology at 9:22 PM on January 31, 2019 [3 favorites]


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