Why young investor made bet on MilkRun a year before it collapsed (2024)

A glamorous young venture capitalist who made a failed bet investing in MilkRun has spoken out following the sudden collapse of the business.

MilkRun, a food delivery service that delivers groceries to your door within 20 minutes, closed this week, with founder Dany Milham blaming worsening market conditions.

AirTree partner Jackie Vullinghs helped guide the venture capital firm's investment in MilkRun, and was a board observer for the failed startup.

The firm invested in MilkRun as part of an $11 million initial capital raising in 2021, and again last year when it was trying to raise another $75 million.

AirTree's second backing in January 2022 came at a time when MilkRun was reportedly losing on average $13 an order.

It is unclear how much AirTree invested in the startup, or how much they lost, but Ms Vullinghs has already hit out following AirTree's failed investment.

'It's been a weird few days. I've only ever wanted to be respected by the people I respect,' she wrote.

'The number of founders and investors who have sent kind and supportive messages in the last few days is extraordinary.

'To every one of you, thank you. You are the people whose opinions matter.'

Just over a year before the company collapsed, Ms Vullinghs wrote a glowing blog post detailing the reasons why AirTree had invested in MilkRun.

'Clearly, there's an opportunity for a new company to improve the grocery shopping experience for a convenience-led world, delivering groceries in minutes at supermarket prices,' she said in January 2022.

'The extent of what MilkRun has achieved in just a few months gives us a glimpse of the extraordinary things they'll make possible in the future.'

But by October, as rising interest rates hit the values of various tech startups and lured investors away, Ms Vullinghs spoke out about being wracked with 'fear and self-doubt trying to find and grow businesses.

'People don't talk openly enough about the really hard times and the kind of psychological traps you get yourself into – the downward spirals – the way you get your identity wrapped up in your company,' she said.

'I am still racked with fear and self-doubt.'

Just six months later, MilkRun had collapsed, with Mr Milham sending an email to his 400 staff on Tuesday informing them the business would close on Friday.

'Since we announced our structural changes in February, economic and capital market conditions have continued to deteriorate, and while the business has continued to performfa well, we feel strongly that this is the right decision in the current environment,' he wrote in the email to staff.

In a letter to investors, AirTree said failures were 'an inevitable part of venture capital'.

'With great upside potential comes risk, and if we don't see some failures, we're likely not adding enough risk into the portfolio for outliers to emerge and become fund returners,' the letter said.

'With that said, this wasn't the outcome we hoped for.'

Another company backed by AirTree, Mr Yum has cut 80 jobs over the last 12 months, while Linktree, also supported by the VC company, has let go 17 per cent of its global workforce.

We are no longer accepting comments on this article.