A gourmet food start-up, which offered ready-to-cook meals from more than 150 restaurants, has collapsed after it failed to secure funding – another casualty in the start-up sector which has taken a beating during global economic turmoil.
The start-up called CoLab, formerly known as ChefPrep, has offices in Sydney and Melbourne and employed 16 staff but fell into administration at the end of March.
The company had enjoyed backing from Mark Bouris, the millionaire entrepreneur and founder of Wizard Home Loans and Yellow Brick Road among other investors.
It had also previously secured $3 million in funding last year from venture firms Artesian Ventures and Berlin-based Global Founders Capital.
Founded in 2021 by Elle Curran and Josh Abulafia, apart from offering ready meals from restaurants, it also sells 1500 products from gourmet pantry food and drinks, fresh produce and frozen ready meals alongside gift packages.
CoLab merged with its Melbourne rival ChefPrep just seven months ago and was born from a shared frustration of mass manufactured ready-made meals and food delivery services.
At the time, the merger was designed to help the business expand into supplying meals in Canberra, Adelaide, Brisbane, and Perth as well as regional NSW and Victoria, while it also had its sights set on an international launch. It also said it had 30,000 customers.
But like other start-ups in the grocery space, the company had struggled to attract investors.
Ms Curran and Mr Abulafia said after a recent funding round fell through, it had been seeking out a buyer.
“The business was in acquisition discussions with a number of businesses and EY was appointed as administrators to manage the sales process and to assess options for restructuring the business,” they said.
“We appointed EY as administrators when it became clear that we were unable to continue acquisition discussions on the current runway
“We have been working closely with EY throughout the process and we are confident in their ability to achieve the best result for the business, employees and creditors.”
The company would continue to trade on a “business as usual” basis according to its website.
EY’s Morgan Kelly and David Kennedy have been appointed as the administrators of Colab and were seeking a buyer.
“Following stabilisation of the business, we are conducting an urgent expression of interest campaign to determine whether a strategic fit for CoLab can be identified,” they said.
“The current environment is challenging for start-ups, but the voluntary administration regime is designed to maximise the chances of a business continuing to exist. We intend to explore all options for CoLab and its stakeholders, and will keep everyone informed as the administration progresses.”
The food delivery start-up sector has suffered a tumultuous time in the past 12 months.
In May last year, grocery delivery firm Send, which promised to deliver groceries in under 10 minutes went under after it burned through a whopping $11 million in just eight months, a report from the administrators revealed.
In July, Delivr — a Victorian food delivery company that styled itself as a rival to UberEats and Deliveroo — also folded, with 200 jobs lost.
Send’s rival Voly later collapsed in November last year and spent a staggering $13 million in just 12 months, another administrator’s report showed, although the brand and its database was later purchased by NSW meat delivery service Our Cow.
Deliveroo also pulled out of Australia at the end of last year after it failed to turn a profit but in an unprecedented move its parent company was going to pay as $19 million to ensure creditors received their money.
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In March, Australian fresh food distribution company In2Food went bust for a second time in less than two years with up to $20 million in debt and 1000 creditors owed money.
Milkrun is the only remaining grocery delivery start-up and boasted an impressive list of investors including Atlassian founders Mike Cannon-Brookes and Scott Farquhar, and Australian venture capital firm AirTree, raising $11 million before it even launched.
But in recent times it has been forced to ditch its key selling point to deliver groceries in 10 minutes, while it also slashed 20 per cent of its staff.
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