SF Food Startup Munchery Shuts Down LA, Seattle, and NYC Operations | Eater SF

"A San Francisco–based food startup that launched locally in 2010, Munchery has shut down operations in New York, Los Angeles, and Seattle and retreated to just the Bay Area. I understood the company announced the move alongside a reduction of 30 percent of its workforce—more than 250 workers laid off—and CEO James Beriker wrote he was “saddened by this development,” while saying the team will “focus on growing our business in San Francisco.” The company delivered fully prepared meals on-demand from its commissary kitchen, and according to Crunchbase had raised more than $125 million, though it was reportedly losing as much as $5 million a month in unsold meals in 2016; in 2017 it cut 30 of its then-900 San Francisco employees in a “normal course adjustment” even as Beriker projected national expansion. A source familiar with Seattle operations said that market was too small to be successful and never gained traction after an initial sales spike following a later series investment of $85 million. I see this retreat as further evidence that the food-delivery market is difficult to prosper in—other players like Sprig (which shut down despite $57 million in funding), Bento, and Spoonrocket met similar fates, though companies like Thistle continue—and Beriker nonetheless concluded on a positive note: “I fundamentally believe in the opportunity that exists in food e-commerce, fresh food production and home delivery — and in our position as a leading innovator in this market.”" - Caleb Pershan