Several weeks after a sudden shutdown left customers and vendors in the lurch, meal-kit service Munchery has filed for bankruptcy. In the Chapter 11 filing, Munchery chief executive officer James Beriker cites increased competition, over-funding, aggressive expansion efforts and Blue Apron’s failed IPO as reasons for its demise.
Munchery owes $3 million in unfulfilled customer gift cards and another $3 million to its vendors, suppliers and various counterparties, the filing reveals. The company’s remaining debt includes $5.3 million in senior secured debt and convertible debt of approximately $23 million. Munchery says its scrounged up $5 million from a buyer of its equipment, machinery and San Francisco headquarters.
The business had raised more than $100 million in venture capital funding, reaching a valuation of $300 million in 2015 before ceasing operations on January 22 and laying off 257 employees in the process. Munchery was backed by Menlo Ventures, Sherpa Capital, e.Ventures, Cota Capital and others.
The company, which failed to notify its vendors it was going out of business, has been scrutinized for failing to pay those vendors in the wake of its shutdown. To make matters worse, emails viewed by TechCrunch show Munchery continued aggressively marketing its gift cards in emails sent to customers in December, weeks before a final email to those very same customers announced it was ceasing operations, effectively immediately.Sharing is caring! Link to this article:
Failed meal-kit service Munchery owes $6M to gift card holders
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