Less than a year ago, Dany Milham was waxing lyrical about his stratospheric goals for Milkrun – the rapid grocery delivery company that was then sweeping the streets of Sydney and Melbourne.

‘I’m just so ambitious,’ he told the Australian Financial Review in a puff piece ahead of his entry as number 40 on the publication’s Young Rich List.

The serial entrepreneur then made the gobsmacking claim that within ten years MilkRun would be a bigger Business than Coles or Woolworths, with plans to expand into Brisbane, Adelaide, Perth and to deliver everything from groceries to iPhones. 

‘We’ve hit our targets and our goals, our investors are happy, we have market leadership so early on,’ he said. ‘The opportunities are endless.’ 

Ten months on, his riders will lock up their bikes for the final time on Friday.

MilkRun announced yesterday that it will close its doors and make all staff and riders redundant, becoming the latest in a long line of delivery start-ups to go under.

Mr Milham sent an email to its 400 workers on Tuesday in which he blamed worsening market conditions for his company’s collapse despite the business ‘performing well’. 

He told his staff they had ‘set out to change the face of grocery delivery in Australia’.

His despondent tone was a far cry from the heady optimism he exhibited last year.

In January 2022, MilkRun raised $75 million in seed capital and was backed by the likes of Atlassian founders Mike Cannon-Brookes and Scott Farquhar, making it one of Australia’s fastest-growing start-ups.

The company was thought to have a valuation in the hundreds of millions.  

Riding high on the success, Mr Milham told AFR’s Yolanda Redrup in May that MilkRun would crush the opposition to concur the ‘one-player market’ of super-fast grocery delivery.

‘We’re the player in Australia. It’s a great opportunity because we’re going to have the entire Australian market,’ he said.

‘It’s my first battle with incumbents. [But] they can’t disrupt their own business faster than we can do it. It’s been proven time and time again.’ 

Mr Milham, who is in his early 30s and has as an estimated personal wealth of $153million, has been a serial entrepreneur from a young age. 

Among others, he has founded a coffee company, a tree planting business and the Byron Bay Skincare brand.

He struck gold with mattress delivery firm Koala which he co-founded with childhood friend Mitch Taylor in 2015.

The company turned over $165 million in 2020-21 and was given a valuation of $500 million.

He had hoped to replicate that success with MilkRun.

Initially, the promise of  groceries, alcohol and other supplies delivered to the doorstep in under ten minutes proved irresistible for customers and investors alike. 

But this week Mr Milham blamed tough economic and market conditions for the eventual  decision to close the business.

‘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,’ he wrote in the email to staff.

Professor Gary Mortimer, business and retail expert at the Queensland University of Technology, told Daily Mail Australia that MilkRun’s collapse was ‘not a shock’.

‘The writing was on the wall for these hyper-grocery delivery start-ups for some time,’ he said.

‘They grew significantly during the pandemic. It was opportunistic entrepreneurship at its very best. We had populations in Sydney and Melbourne locked down and people not wanting to venture out of the home.

‘Obviously as the pandemic came to a close, people ventured back into supermarkets and we started to see these businesses start to fall over. 

‘First to go was Deliveroo, then there was Send, then Quicko and Voly. For Milkrun the writing was on the wall for sometime. It’s incredibly difficult to scale that business when you’re needing riders and bikes to deliver the groceries in some cases under 15 minutes – it’s just not sustainable. 

‘When you’ve got 3.5 per cent unemployment – people aren’t choosing to ride bikes, they are choosing to get jobs elsewhere.’

Prof Mortimer said that small and agile start-ups like MilkRun and Voly had been able to exploit the demand for rapid deliveries in urban areas during lockdown because for Woolworths and Metro it was a case of being ‘tough to turn a big ship around’.

However, they had now introduced their own quick-turnaround delivery services which squeezed the start-ups.

‘It’s really hard to compete with the might of big supermarkets that offer not just speed but also range,’ Prof Mortimer said.

‘The investment that both big supermarkets have put into their online operations and automated fulfilment centres – they are really scaling up to be ready for consumers to continue shopping online for food and groceries. 

‘Ten cents in every dollar of food and grocery is now purchased online and then benefit is they have got the capital behind them to invest in this infrastructure and customers trust them.’

Last year, Woolworths introduced Metro60, which aims to delivery groceries in under an hour, while Coles has introduced a 60-minute click and collect service across around 600 stores. UberEats has also expanded well beyond simple takeaway food deliveries. 

Mr Milham reassured staff they would be paid severance packages.  

‘We’ve always been committed to doing things the right way, and winding down the business while we still have a sufficient cash balance enables us to ensure our people and suppliers are paid in full,’ he wrote.

Prof Mortimer praised MilkRun’s handling of their downfall.

‘They’ve made sure that they are going to be able to meet their liabilities, including their staffs’ wages,’ he said. 

‘It’s disappointing to see small start-ups like this close but they are not alone.’

There had been signs of trouble at MilkRun for some time. Just weeks ago, the company announced it was slashing 20 per cent of its workforce. 

‘With economic and market conditions changing rapidly, we need to get ahead of the curve and evolve the way we operate to fit the current environment and extend our runway,’ Mr Milham wrote to a letter addressed to staff two months ago.

‘This means making some structural changes and some tough decisions that will unfortunately impact some of our people.’

Last June, Mr Milham apologised to customers who complained they had failed to receive their orders within the promised 20 minute timeframe.

Mr Milham admitted the company had experienced an ‘unacceptable’ decline in service.

‘There have been a number of factors which have, at times, led to an unacceptable decline in our delivery experience in busy periods,’ he wrote.

‘These included ongoing Covid cases affecting the availability of riders and hub staff, record rainfall in Sydney, and the challenges involved with scaling a fully employed workforce faster than anyone has ever tried before.’ 

The problems became more pronounced eight months later when Mr Milham laid off a substantial part of the workforce – and culminated with his email today.