Woolworths Group purchases failed fast delivery service Milkrun after it went broke last month

Woolworths has bought out failed fast grocery delivery start-up Milkrun, just one month after the company went bust with hundreds of staff made redundant.

Woolworths has purchased the MILKRUN name. Picture: Supplied / NCA Newswire

A major supermarket chain has resurrected broke grocery delivery brand Milkrun after the start-up shut its doors last month.

Woolworths’ subsidiary Metro60 has acquired the once-successful company’s name for its own delivery service which sees “groceries and more delivered in minutes”.

The supermarket giant purchased the brand name following a “long admiration” for its innovation, according to Woolworths Group CEO Brad Banducci.

The deal is thought to be worth about $10 million, according to the Financial Review.

“We’ve long admired MILKRUN’s innovative brand, dedication to customers and ambition to shake up the grocery delivery model,” Mr Banducci said.

“We are thrilled that the MILKRUN story will continue to live on and thrive with Metro60 relaunching as MILKRUN now powered by Metro.”

Milkrun also made the announcement it had been acquired via its social media on Thursday morning, after “teasing” customers in an earlier video shared on Wednesday evening.

“The cat is well and truly out of the bag. MILKRUN is back in the game, now powered by Woolworths Metro,” a caption alongside an Instagram reel read.

“Download the brand new, shiny MILKRUN app and let’s get this grocery delivery party restarted. Feels good to be back.”

The news was welcomed by Milkrun’s cult following, with dozens of happy customers raving about the news online.

MILKRUN founder and CEO Dany Milham made the difficult decision to shut MILKRUN’s doors last month. Picture: Supplied

The start-up’s original founder Dany Milham also embraced the announcement, stating he was glad to see new life brought to the Milkrun name.

“MILKRUN pioneered rapid grocery delivery in Australia, and I’m pleased to see the brand continue in Woolworths hands,” he said.

Mr Milham was forced to make the heartbreaking decision to shut up shop on his Milkrun start-up just over a month ago due to worsening economic and capital market conditions.

After launching it in September 2021, the delivery company banked an impressive $75 million in funding led by a US venture capital firm, making it one of the fastest growing ventures in Australia last year.

But unfortunately structural changes and a difficult economic environment led to the company’s downfall, leaving 400 employees without a job.

“I’m writing to let you know that we have made the difficult decision to wind down the business, and as a result, MILKRUN will cease trading this Friday,” Mr Milham wrote in a letter to staff last month.

“Since we announced our structural changes in February, economic and capital market conditions have continued to deteriorate, and while the business has continued to perform well, we feel strongly that this is the right decision in the current environment.”

Not even Milkrun‘s impressive list of investors including Mike Cannon-Brookes and Scott Farquhar could provide a lifeline to the struggling business which promised to deliver groceries within 10 minutes.

Woolworths chief executive Brad Banducci said he “long admired” the start-up. Picture: Supplied

Since acquiring the brand, Metro 60’s app and website now features the “MILKRUN powered by Metro” name sporting its traditional royal blue and white colour palette.

Woolworths states the functionality of its online platforms remains the same, with new customers entitled to a zero delivery fee for their first three orders.

Meanwhile existing Metro60 customers will be charged a $5 flat delivery fee and zero service fee for the service.

The same Metro60 model will be used to fulfil orders, which uses third party couriers to deliver items in an average time of 33 minutes.

“Orders will be fulfilled from our network of Metro stores which will give customers the choice of over 10,000 product lines including hot roast chickens, fresh sushi and much more,” Mr Banducci said.

Milkrun, now powered by Metro, is available in more than 500 suburbs across Sydney, Melbourne, Canberra and the Gold Coast.

Originally published as Woolworths Group purchases failed fast delivery service Milkrun after it went broke last month