Munchery Delivers Last Meal as Other Food Delivery Companies Continue to Thrive

A few years ago, we started to see more virtual restaurants pop up on the scene. These are restaurants without a traditional brick-and-mortar space, instead, they are delivery only.

One of the food delivery companies that was on the rise was Munchery, a San-Francisco startup founded in 2010 that delivered chef-crafted meals. At one time, the company raised $120 million and had a valuation of $300 million.

However, as of last Monday, Munchery shut down the business operations immediately and the company's 250 employees were fired with no severance.

"Munchery’s decision to cease operations on Monday came as a surprise to many employees. Some of them had been busy prepping meals ahead of the announcement," writes "Digital Commerce 360." "But the warning signs had been clear for a while: There had been calls from vendors demanding to be paid, one of the people said. A company forklift was repossessed. And the startup had half a year earlier shut down service in several cities."

Apparently, the company owes tens of thousands of dollars. Deleware, the state where the company is incorporated, said that Munchery owes $143,429.63 in overdue taxes.

In 2016, "Bloomberg" reported that the company was losing up to $5 million a month.

Read more about Munchery’s closure at “Digital Commerce 360” now.

But as one food delivery company shutters its operations, another announces a massive funding round.

Chowbus, a Chicago-based food-delivery app founded in 2015, has announced a $4 million seed round of funding.

The app offers Asian food delivery to users in Chicago, Boston Philadelphia, NYC, Lansing, ML, and Champagne, IL.

But instead of only delivering the meals directly to users, Chowbus also stops at a few different spots in the areas it delivers at scheduled times for users to pick-up. This shuttle service has a $1 delivery fee and traditional delivery is $5.99.

Speaking of virtual or ghost restaurants, on a recent episode of The Takeout, Delivery, and Catering Show, Hosts Erle Dardick and Valerie Killifer discuss these concepts and how savvy operators are using this model to their advantage. Listen to the episode below to learn more about these restaurants and how they operate.