In an extraordinary email to customers, the CEO apologized acknowledging that they may have had a “bad experience” recently.
The CEO of an Australian company that promised to deliver groceries in less than 10 minutes has sent a stunning email to customers apologizing if they feel ‘disappointed’ with his service.
Young Rich Lister, Dany Milhan is the CEO of the milkrun start-up called, which raised $11 million on its own before launching in September last year and another $75 million this year.
The startup was backed by Atlassian’s giant tech founders, billionaires Mike Cannon-Brookes and Scott Farquhar.
Mr Milham, who is worth an estimated $150 million, said there was ‘no excuse’ but he believed there had been an ‘unacceptable decline’ in customer experiences with Milkrun, in an email sent to customers on Friday.
“There were a number of factors that sometimes resulted in an unacceptable drop in our delivery experience during peak periods,” he wrote in an email to customers.
“These included ongoing Covid cases affecting the availability of riders and hub staff, record rainfall in Sydney and the challenges of scaling a fully employed workforce faster that anyone has ever tried before.
“I want to take this opportunity to apologize if you have recently experienced a late delivery or bad experience. No apologies, you deserve better and I want you to know that I am committed to ensuring that we keep our promise and continue to deliver the best experience you’ve ever had.
Milkrun currently delivers to 50 Sydney suburbs and 26 Melbourne suburbs, stocking up to 2,000 groceries, which are housed in a network of warehouses described as dark stores.
Mr Milham went on to tell customers it wasn’t ‘all bad’ with the start-up changing ‘the way Australians shop for groceries’ to create ‘a mind-blowing experience’ and revealing that it had also hired more than 1,000 employees with riders using e-bikes to deliver orders.
To address the company’s delivery issues, he said they opened new hubs to reduce delivery time and distance, hired more passengers and staff, and worked with suppliers.
Milkrun hopes to take a slice of Australia’s $122 billion grocery market, but now faces fierce competition from one of the supermarket giants.
Big muscle competition in
Woolworths revealed this week that it has launched a new app which promises door-to-door shopping within the hour for $5, with the new venture starting in 11 suburbs in Sydney’s east, including some areas that Milkrun already operates like Bondi.
The app, called Metro60, will expand to hundreds of new suburbs across NSW as well as other states in the future, according to Woolworths.
It offers 4,000 products ranging from fresh produce to pet food to baby products, which will be delivered by Uber couriers.
The first three deliveries will be free through the app before the $5 delivery fee kicks in with a minimum spend of $20 and this has been described by the supermarket giant as a way to get snacks, last minute ingredients or meals.
“Metro60 is a game-changer for those occasions when customers are short on time and can’t get to a Woolworths supermarket or Metro store, but need something fast,” said Von Ingram, Woolworths Chief Transformation Officer. .
Other start-ups in the sector in difficulty
This comes as other industry start-ups that emerged in the past year have struggled.
One called Send collapsed in May, risking 300 jobs in Sydney and Melbourne, with a trustee report revealing the start-up had burned down thanks to a whopping $11 million in just eight months.
Send was available in 46 Sydney and Melbourne suburbs and had 46,000 registered users, but the admins report revealed that Send’s sales topped $8,113 in October last year but suffered a loss of over $658,000.
Fast forward to March and Send’s sales had skyrocketed more than 50 times to nearly $417,000 per month, but losses reached an astounding $2.38 million per month.
The largest cost was staffing, which amounted to $5.5 million over eight months, administrators said.
At the time, Mr Milham said Milkrun had reviewed Send’s financial information and had a significantly different business from his model.
The other start-up is Voly, which was co-founded by Mark Heath and delivers to around 42 suburbs after raising $18 million in December 2021.
But it laid off half of its office staff this month and closed its warehouses in Crows Nest, Manly, Maroubra and Alexandria, with delivery times extended to 20 minutes, and plans to expand to Melbourne, the Sydney Morning Herald reported.
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