Munchery lays off workers, waves goodbye to founders

San Francisco-based Munchery laid off 30 workers this week and announced it’s cutting ties with its two founders, news that seemingly lumps the startup into a growing group of app-based companies struggling to make money by delivering food.

Founders Tri Tran — the former president and CEO, and Conrad Chu — the chief technology officer, are moving on as part of a “natural” transition, the current CEO, James Beriker, told SiliconBeat.

Beriker said the founders made the decision to leave themselves, and promised there was no conflict.

“You’ve seen this time and time again, I’m sure, in Silicon Valley,” Beriker said, “where great founders create an innovation and six years in another team comes in to grow the business, really take it to the next stage, and the founders decide to move on to something else.”

Beriker, a former Yahoo executive and Simply Hired CEO, replaced Tran as president and CEO in November, and Tran moved into a role as chief strategy officer.

Bloomberg reported the layoffs and the transition of the founders Wednesday.

Beriker told SiliconBeat that management’s decision to lay off 30 of Munchery’s 900 employees — mostly in the San Francisco headquarters — gave “no indication of any weakness in the business.”

Munchery grew 60 percent last year over 2015, he said, and he expects the startup to make a profit in the next 12 to 18 months.

“The market is massive,” Beriker said.

Bloomberg reported Tran sent a bittersweet goodbye email to his employees: “As with all journeys, there have been highs and lows, but we went through it together. Our hope is that we all became better for it,” Tran wrote, according to Bloomberg. “You either win or learn, never lose.”

When Beriker joined Munchery, a company news release emphasized his experience growing business operations and achieving profitability — something food delivery startups in the Bay Area and beyond have struggled with recently.

San Francisco-based Bento, which prepared and delivered Asian-inspired meals, shut down its kitchen last month after making several changes to its business model in a desperate attempt to stay afloat. In February the startup stopped on-demand delivery, instead offering only scheduled deliveries, in an attempt to cut down on wasted food and reduce delivery costs. In May, Bento shut down its app altogether and transitioned to a wholesale model, selling its meals to be delivered by other services such as Caviar, Postmates and GrubHub. But despite the changes, the startup couldn’t bring in enough revenue to keep the business going.

Berkeley-based food-delivery service SpoonRocket shut down in March. Square tried unsuccessfully to sell money-loosing food-delivery service Caviar last year, according to Bloomberg. And DoorDash was forced to slash its valuation to raise more money.

Photo: A Munchery meal is displayed. (Courtesy of Munchery)

Updated 4 p.m. with comments from CEO James Beriker.

 

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  • Sobeitunion

    I’m a big fan of Munchery and a loyal customer. I hope they make it. In fact, I hope they thrive.

 
 
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