Grocery delivery startup Voly cuts operations as tech sector collapses

A former employee, who wished to remain anonymous to protect their future prospects, said Voly had laid off more than half of its office staff at the beginning of the month, in a wave of job cuts.

Of the three companies launched last year in hopes of conquering the Australian supermarket market, Send has collapsed and Voly has made significant cutbacks. Milkrun founder Dany Milham declined to comment.Credit:Composite: Monique Westerman

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†[Co-founders] Mark and Thibault had been very open with us the Friday before,” said the staffer. “They said, ‘The changing start-up landscape is making it difficult to fundraise, Tuesday we have a meeting with investors, we’ll let you know how it goes.’ And then on Wednesday we were all released.”

The staff member said they knew startups could turn south quickly, but was “disappointed” because Voly’s two founders had previously said the company had enough money to keep going until February next year. The couple were good people, “super inspiring” and had put together a talented and collegial team, but needed guidance, the source said.

Store managers didn’t get much notice, the staff member said, and one left scathing comments on an online review site.

The warehouses at Voly’s Crows Nest, Manly, Maroubra and Alexandria have been closed, the former employee said, leaving only three or four in the city and surrounding suburbs, while a planned expansion into Melbourne appears to have been shelved. Delivery times have been extended to 20 minutes, but the company is still active.

Its bigger and better-funded rival, Milkrun, is led by serial entrepreneur Dany Milham, who has not returned requests for comment. in a Australian Financial Review article Published last month, Milham, who made Milkrun an overnight success, insisted that his company would be bigger than Coles in a decade, saying it had better margins than people thought because of its efficient workforce and the product range.

Milkrun founder Dany Milham believed his new business would grow much faster than his previous start-up, mattress and homeware company Koala.

Milkrun founder Dany Milham believed his new business would grow much faster than his previous start-up, mattress and homeware company Koala.Credit:Josh Robenstone

Elsewhere, Milham has dismissed comparisons to other companies in the industry, and there are those in the industry who think Milkrun could benefit from thinning out its competition. Send, the third start-up to hit the market last year, collapsed in early May† It had tried to sell itself to Milkrun and Voly before failing, sources said.

It is not uncommon for start-ups to go bankrupt. The industry sees it as a valuable price to pay for ambitious people seeking to create value for investors, new jobs and new customer experiences. Numerous venture capitalists have told before: The Sydney Morning Herald and The age they still have money to invest in good companies.

But industry insiders have long been skeptical that a local player would become profitable in the long run in the instant delivery industry, which pursues customers with cheap prices and super-fast service.

That’s because the start-ups faced high lease costs from locating stores in densely populated urban areas, guaranteeing workers full industrial minimum wages, unlike competing delivery services. such as Uber and DoorDashand lack the economies of scale enjoyed by supermarket giants such as Coles, Woolworths and Aldi.

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A European company called Gorillas, which served as a template for the local start-ups, has been cutting staff and scaling back expansion plans, according to a recent Bloomberg report, while conducting secret talks with rivals about a sale or merger. Last year, the company raised nearly $1 billion at a valuation of roughly $3 billion, but is now struggling to raise funds as investors begin to question the sector’s profitability. US rival Gopuff also laid off hundreds of employees earlier this year.

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