Delivery service Milkrun given new lease of life after Woolworths deal

Grocery delivery service Milkrun has been resurrected as part of Woolworths after the supermarket giant acquired the brand.

The start-up was launched in September 2021 during the height of the COVID-19 pandemic and offered super fast grocery delivery across Sydney CBD and Melbourne.

But in April it abruptly shut up shop due to worsening economic conditions.

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The move resulted in all its 400 staff in Sydney and Melbourne being made redundant.

Now Woolworths has confirmed it will relaunch its current Metro60 service with Milkrun's blue branding, name and customer list from today.

Milkrun founder Dany Milham and Woolworths have not revealed the value of the deal, but the Australian Financial Review reports sources said it was worth about $10 million.

Woolworths chief executive Brad Banducci said his company had long respected the Milkrun brand and its ambition to overhaul the grocery delivery sector.

"We've long admired Milkrun''s innovative brand, dedication to customers and ambition to shake up the grocery delivery model," he said.

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

The current functionality of the Woolworths app will remain the same.

The deal also provides access to Milkrun's name, social media accounts and existing customer relationships.

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Woolworths said orders will be fulfilled from its network of Metro stores which will give customers the choice of more than 10,000 product lines.

"Milkrun pioneered rapid grocery delivery in Australia, and I'm pleased to see the brand continue in Woolworths hands," Milham said.

Milkrun was one of the first Aussie start-ups to deliver groceries and alcohol superfast, promising it at your door in under 20 minutes for metro-eligible areas.

The company saw a huge venture capital raising of more than $75 million after its launch when the ultrafast delivery model caught the eye of billionaire Atlassian founders Mike Cannon Brookes and Scott Farquhar and a plethora of local firms.

But leading up to its closure in April, the company struggled with Australia's economic downturn as inflation lead to skyrocketing grocery prices and the service had to keep up with prices.

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