‘It’s been humbling’: former Milkrun exec Luke Latham lifts the lid on new role with payments firm Airwallex
In the first interview since Milkrun’s collapse, its former chief operating officer reflects on lessons learned and his new role leading $8bn payments giant Airwallex.
Former Milkrun chief operating officer Luke Latham has lifted the lid on the collapse of the grocery delivery start-up and his decision to join fast-growing fintech unicorn Airwallex, in his first interview since taking on the new role leading the $8bn tech business.
Milkrun’s high-profile and tumultuous two-year journey came to an end earlier this year when Woolworths announced a deal believed to be worth around $10m to rebrand its Metro60 platform into Milkrun and gain access to its customers, two months after the start-up closed its doors and laid off all staff.
As The Australian previously reported, Milkrun last year twice attempted to raise a Series B funding round from investors, who declined to deploy more cash into the start-up, which had been losing as much as $13 per order according to a slide deck shown to prospective investors.
Mr Latham, who was Milkrun’s chief operating officer and previously spent a decade at tech giant Amazon, said that the grocery start-up’s demise was due to its needs to meet economic hurdles and reach a certain economic scale, as well as its need to continue to raise required additional capital.
“All of that was true on day zero and it was true when we decided to prudently cease operations and pursue the exit,” Mr Latham said. “It’s not a business model that is agile and nimble enough to be able to turn the cost structure on its head, but I think you’ve had to work in a low-margin high-scale business model in the past to get how the economics work. And fortunately I was pretty well-trained in that at Amazon.
“We were well ahead of the investment thesis that was initially signed up for and it’s just a shame that a couple of those other compelling milestones never came to fruition.”
The executive welcomed Milkrun’s deal with Woolworths and said that provided a sense of validation for the employees and executives who invested their time, energy and resources into building it.
“I must admit, the most gratifying thing coming out of it was the reaction from the founder and the building community,” he said. “It was really refreshing for me to come back out into the market and be received in a manner that was not only receptive, but interested in the scar tissue accrued over that sort of journey. I was humbled by the number of really high-profile founders and operators reaching out on the basis that I’ve been through that experience.”
The executive is now leading local operations for Airwallex, a similarly high-profile financial platform that this month opened a second Australian office in addition to its local base in Melbourne.
He said the payments firm, which allows other businesses to operate internationally by enabling quick cross-border transactions, now has around 200 Australian staff and 1400 globally, with plans to ramp up its local workforce. More than 70 per cent of its customers in Australia and New Zealand use multiple products like payment acceptance, treasury services, foreign exchange, expense management and cards or embedded finance, while its Australia and New Zealand customer base jumped by 43 per cent in the first half of 2023 from a year earlier.
Airwallex was most recently valued at $US5.5bn ($7.91bn) in a November funding round when it sought $US100m in financing, taking its total raised to $US900m from investors Square Peg, Salesforce Ventures, Sequoia Capital China, Lone Pine Capital, Hermitage Capital, 1835i Ventures and Tencent, as well as Hostplus and a North American pension fund.
“There are few companies being built out of this part of the world that are challenging the industry in the way that Airwallex is,” Mr Latham said. “I’ve been fortunate to have a number of phases in my career of a comparable pattern in contending with a traditional industry, and it felt right at home to be jumping on board at this point in the company’s life cycle.
“They have a market leading product that speaks for itself. They’ve got a business, it’s well established and growing dramatically. And it’s a huge advantage, having worked in plenty of multinational businesses, to be working out of Australia, so proximate to the centre of gravity of product and technology leadership, because this is where the company was started. That unique combination for me sealed the deal.”
He added that he sees many parallels between his time at Amazon and what Airwallex is now building up.
“I spent nearly a decade at that company in what was a pretty formative time,” Mr Latham said.
“I see a lot of resemblance in the state of the business of Airwallex and what were the very early days with Amazon Web Services, bringing in a transformative infrastructure that was changing the face of enterprise technology. And a lot of what we had to get right was about people, was about culture and operational excellence.
“Those foundations are definitely top of mind for me coming into this role. But, thankfully, I feel like I’ve been here before.”
