Gourmet ready-meal and pantry goods delivery service CoLab has called in the administrators, becoming the latest direct-to-consumer food platform to stumble in a rapidly changing Australian market.
CoLab officially launched in August 2022 as a combination of Sydney-based ChefPrep, which delivered restaurant-made meals for preparation at home, and Co-Lab Pantry, a Melbourne platform offering high-end fare from boutique producers.
It offers shoppers a range of ready-to-heat bao, pizzas, dumplings, and curries, from restaurants including Farro, South Yarra Deli, and Oriental Teahouse.
Upmarket seasonings and sauces are also on offer, from makers including Entrecôte, Chotto Motto, and Fancy Hank’s.
The enterprise was helmed by ChefPrep co-founders Elle Curran and Josh Abulafia, who raised nearly $6 million in funding in the 12 months leading to the Co-Lab Pantry acquisition.
Avin Chadee and Natasha Buttigieg of Co-Lab Pantry stayed on for the new combined venture.
Just months after envisioning CoLab’s future as the “Amazon for food”, Abulafia on Wednesday said the withdrawal of extra funding commitments led to the business’ administration.
CoLab was “in the process of closing out a new round of financing that fell through,” he wrote on LinkedIn.
“We then had significant interest for the company to be acquired and decided to put the company into [voluntary administration] to help, but due to unforeseen events our timelines became truncated.”
CoLab has laid off its staff as a result, he said.
Documents listed by the Australian Securities and Investment Commission show CoLab appointed Morgan Kelly and David Kennedy of Ernst & Young as joint administrators on Monday, March 27.
The administrators intend to continue trading the businesses, according to a note on the CoLab website, and are “seeking proposals for an urgent recapitalisation of the Group or the purchase of the Group’s business and assets.”
The first meeting of creditors took place Thursday morning.
SmartCompany has contacted Ernst & Young for comment.
“We want to focus on speed to help the staff find a new job and transition as quickly as possible,” Abulafia said, while inviting prospective buyers to visit the CoLab platform.
“It fucking rocks and this sucks,” he added.
One small business that supplied products to CoLab told SmartCompany they received an email on Wednesday informing them that the business would be winding down, and asked them to pick up unsold stock within the next week.
SmartCompany understands the business is not owed any money, as CoLab sold the products on consignment.
While Abulafia says CoLab’s administration was the result of a specific financial setback, it comes amid broader turmoil in the broader food delivery sector.
Rising interest rates and the prospect of falling consumer spending have spooked investors from pumping further funds into cash-burning enterprises, while inflation has made it costlier for those same firms to compensate delivery personnel and maintain rental agreements at delivery hubs.
Deliveroo Australia collapsed in November after its global parent company found its operations were not competitive, and that it would cost too much in further investment to challenge players like Uber Eats.
‘Instant’ grocery delivery services have also stumbled from their pandemic-era highs, when on-again, off-again lockdowns built hype around companies like Milkrun.
Milkrun laid off a fifth of its staff in February, with founder Dany Milham saying a “rapidly” changing economic environment had forced “structural changes and some tough decisions that will unfortunately impact some of our people.”
The firm continues, without its former 10-minute delivery promise, where other competitors have collapsed entirely: Voly, Send, and Quicko have all folded.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
