Voly cuts operations as the grocery delivery sector struggles with a startup

“[Co-founders] “Marc and Thibault were really open with us the previous Friday,” the employee said. “They said, ‘The changing startup landscape makes it difficult to raise money, we meet with investors on Tuesday and we will let you know how it goes. “And then on Wednesday we were all abandoned.”

The employee said they realize startups can quickly head south, but was disappointed that Voly’s co-founders had previously said the company had enough cash to run into February. The source said the couple were good and “very inspiring” people who had put together a talented and collaborative team but needed direction.

The employee said that store managers did not receive much notice, with one leaving scathing comments on an online review site.

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

Its biggest and best-funded competitor is headed up by serial entrepreneur Danny Melham, who did not respond to requests for comment. in Australian Financial Audit In an article published last month calling Melkern an “overnight success,” Mulham insisted his company would be bigger than Coles in a decade, and said it had better profit margins than people thought due to its hiring efficiency and range of products.

Elsewhere, Milham has dismissed comparisons with other companies in the sector, and there are those in the industry who believe Milcren could take advantage of its weak competition. Send, the third startup to hit the market last year, collapsed in early May. Sources said she tried to sell herself to Melcron and Foley before failing.

It’s not unusual for start-ups to collapse, which the sector sees as a worthwhile price to pay for ambitious people trying to create value for investors, providing new jobs and new customer experiences. Previously many venture capitalists said Sydney Morning Herald And the the age They still have money to invest in good companies.

But industry insiders have long been skeptical that any local player will profit long-term in the instant grocery delivery sector, which attracts customers with cheap prices and super-fast service.

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This is because start-ups have faced high rent costs from setting up stores in dense urban areas, guarantee employees the full minimum wages for the industry unlike competing delivery services such as Uber and DoorDash, and lack the economies of scale enjoyed by supermarket giants such as Coles and Woolworths. and Aldi.

A European company called Gorillas, which has served as a model for local startups, has cut staff and scaled back expansion plans as it holds secret talks with competitors about a sale or merger, according to a recent Bloomberg report. Last year, the company raised nearly $1 billion at a valuation of about $3 billion, but is now struggling to raise funds as investors begin to doubt the sector’s profitability. US rival Jobov laid off hundreds of employees earlier this year.

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