B2B Payments

Munchery Shutdown Leaves Suppliers Without Pay

On-demand food delivery company Munchery shuttered operations earlier this year, sending an email to customers that it would immediately cease operations.

While the news may not have come as a surprise, Munchery’s demise is nevertheless leaving its suppliers high and dry, according to reports Wednesday (Feb. 20) in Marketplace.

The San Francisco-based company reportedly owes tens of thousands of dollars to its food suppliers, many of which are small businesses, and some of which told reporters they were never warned by Munchery of its plans to shut down.

One small food business, Three Babes Bakeshop, spoke with Marketplace about the saga. The firm’s owner, Lenore Estrada, reportedly fulfilled an order of pies for Munchery that came with a $20,000 invoice, yet Munchery has reportedly not paid. According to Estrada, she only found out about Munchery’s closure because she was on the company’s customer email list, used to warn customers that it would no longer operate.

Munchery CEO James Beriker told Marketplace in an email that he acknowledges the challenge the company’s closure presents to its small suppliers, and said he is working on possible remedies, though did not elaborate on what they may be, reports said.

Now, Estrada is calling on Munchery’s own venture capitalists, board members and other investors to foot the bill for unpaid invoices.

“What we want is for the venture capitalists, the investors and board members to take responsibility and write a check for the money that we’re owed,” she said during a protest outside of Sherpa Capital, one of the venture capital companies that invested in Munchery. The company raised $125 million in funding from Sherpa and Menlo Ventures. Both firms declined to comment on the matter, reports said.

Similar issues with late supplier payments have emerged following the bankruptcies of Sears as well as Toys R Us in recent months.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.