Munchery is in trouble. According to a new report from Bloomberg, the San Francisco-based meal delivery startup is losing millions of dollars a month, struggling to raise additional funding, and is on the hunt for a new CEO. This marks the latest and perhaps most significant challenge for a company marred by neighbor complaints, allegations of lax food safety, and code violations.
Unlike ingredient delivery service Blue Apron, Munchery relies on scores of drivers to bring meals made in its industrial kitchens straight to your door. The idea being that a customer only needs to heat it up, and he or she has a high-quality and healthy dinner ready to go.
Valued between $250 million and $275 million as of last year, from the outside the company sounds like a success story. However, Munchery board member Jeff Housenbold told Bloomberg that the business is losing $3 million a month — down from $5 million a month earlier in the year — and is searching for a replacement for current CEO Tri Tran. Housenbold, the former CEO of Shutterfly Inc., is himself vying for the role.
If Tran is indeed given the boot, it will make the second major executive shakeup at Munchery this year. In March, the founder of La Boulange, Pascal Rigo, said he was leaving the company. Rigo had worked as Munchery's Chief Customer Experience Officer for just five months when he announced his departure, saying that he "just did not share anymore their strategy for growth and their ‘vision’ for the future."
While Munchery's struggles are notable, they are not necessarily unique. In March, competitor SpoonRocket abruptly went out of business due to an inability to secure additional funding, and many have surmised that shakeups in the crowded food-delivery startup space were to come.
Munchery, for its part, has reportedly raised $120 million. Like SpoonRocket before it, the company is struggling to find additional investors. Tran, however, sees only clear skies ahead. "I am incredibly excited about our future and look forward to continuing to work with the team to take the business to the next level."
Related: Munchery Forced to Close Richmond Outpost After Code Violation