Fast delivery service Milkrun tried to raise extra cash twice in 2022 despite starting the year with $75 million from Tiger Global in a Series A last January, but failed to attract investors amid the financial failure of its rivals .
The Australian reports that the Sydney startup offered its Series B pitch deck to potential backers, claiming it would reach $7 billion in aggregate revenue by 2026, capturing 20% of the country’s online market share in the grocery, meal kit and alcohol. Milkrun also hopes to capture 5% of pet, baby, gift and pharmacy sales.
To put that figure in perspective, the Woolworths group, which includes Big W, saw its e-commerce sales grow 39% in FY22, with e-commerce penetration reaching a record 11% and about $6 .7 million in revenue. This is done by Endeavor Group, owner of brands such as BWS, and split off from the parent company.
Koala co-founder Dany Milham launched Milkrun in Sydney in September 2021 as a 10-minute delivery service, having raised A$11 million in June of that year. The service currently operates in Sydney and Melbourne.
Early backers included local VC Airtree, as well as Skip Capital and Grok Ventures – the family investment vehicles of Atlassian billionaires Scott Farquhar and Mike Cannon-Brookes.
The delivery service continues to lose about $10 on each sale and continues to burn money, much like its now-defunct local rivals, Send and Voly.
Limit losses
The 10-month-old pitch documents revealed that the company generated about $4 million in monthly revenue and hoped to double that to an annual run rate of $100 million by the end of 2022. But the pitch, drafted in April, caused the company to lose $13 per order.
That pitch saw Milkrun generate more revenue per customer than Amazon’s US retail and expand into areas such as insurance and takeaway, predicting that the average order value in Sydney’s eastern suburbs will rise from $28.35 to $28.35 in 15 months. $41.72 in June 2023, with alcohol in the mix. Ten months ago it was at $34.
Milham said in June that the loss was cut to $10 and thought they’d be doing $1 per order in a few months. to international colleagues”.
“This is in no way a bad thing for our business at this stage and the fact that it was $40 and as high as $13 two months ago shows that we are meeting our goals and scaling as planned,” said Milham.
But amid Milkrun’s drive to boost profitability, rival Send collapsed in May 2022 after failing to find investor support in hopes of raising $15 million at a $50 million valuation.
Administrators Hall Chadwick believe creditors, who owe a total of $17.7 million, will receive between 15 cents and 27 cents in the $1 post-liquidation of Voly.
Startup Daily has sought comment from Milham and AirTree on Milkrun and will update this story if we hear from them.
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