Fall from grace: $11.8 million meal-delivery business FivePointFour collapses
Monday, March 18, 2019/
Ready-to-eat meal-delivery business FivePointFour has collapsed into administration, with customers told their next orders will not be delivered.
The business lodged a notice of external administration with the corporate regulator last Friday and emailed customers, blaming increased competition and rising costs for its downfall.
Administrators from Farnsworth Shepard are now running the company but did not respond to comment requests on Monday morning.
“In the face of increasing competition and our cost to serve, we have made the really difficult decision to stop taking orders with immediate effect as of today,” the email, sent to customers last Wednesday, said.
“Any future orders for next week and beyond will unfortunately not be delivered.”
Founded in 2012, FivePointFour focused on healthy low-carb meals, marketing itself to athletes and gym-goers.
It claimed to have about 15,000 customers in 2016, booking $11.8 million in revenue after growing over 940% in the preceding three years.
But Australia’s bourgeoning meal-delivery industry has become much more competitive since then, with leaders such as Hello Fresh, YouFoodz and Marley Spoon aggressively chasing market share.
Last year, grocery-delivery business Aussie Farmers Direct succumbed to the pressure and was subsequently wound up.
It previously had plans to expand into China and Southeast Asia.
Two new directors, Rajeev Dhawan and Garry Roy Sladden had joined the business months earlier.
The business told customers last week those with pre-paid orders will be issued refunds.
“For our customers with future pre-paid orders, the customer service team will be working diligently to process your refund and will be in touch with you over the coming days,” customers were told.
This article was updated at 14:30PM AEDT November 29, 2019.
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