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Milkrun investors to get back less than 20¢ in the dollar

Nick Bonyhady
Nick BonyhadyTechnology writer

Investors in failed delivery start-up Milkrun, which became the face of the technology industry’s exuberant bets on risky propositions when it collapsed in April, will get back less than 20 per cent of their $86 million investment.

A source close to the company, who spoke on the condition of anonymity, said the return would be “in excess of $10 million”. A summary of its assets disclosed in new regulatory filings, adjusted for the subsequent sale of its brand to Woolworths, suggests investors could extract about $14 million from the Milkrun collapse, implying an 84 per cent loss.

Milkrun founder Dany Milham’s nous for branding gave his company a huge public profile. But the business lost millions. Josh Robenstone

Exactly how the remaining cash is split between Milkrun’s backers, which include giant US fund Tiger Global, Sydney’s AirTree Ventures and the private interests of Atlassian founder Mike Cannon-Brookes and Scott Farquhar, will depend on the way their investments were structured.

But unlike many start-ups that fail, Milkrun went into liquidation having paid its former staff and with more than enough money to make its suppliers and landlords whole. Liquidator Cor Cordis’ report lodged with the Australian Securities and Investments Commission on Friday declared Milkrun had about $3.9 million when founder Dany Milham put it into liquidation in July.

Had it gone bust with unpaid liabilities, the taxpayer would be on the hook to pay staff their outstanding wages and leave entitlements through a federal scheme called the Fair Entitlements Guarantee that is routinely over budget.


Milkrun raised $86 million in 2021 and 2022 to build a network of riders delivering supermarket items from tiny suburban warehouses.

At the time, interest rates were near zero, fuelling a venture capital mentality that prized revenue growth ahead of profitability. The environment suited companies such as Milkrun, which required hefty funding to directly employ riders, lease warehouses in inner-city locations, and achieve sufficient scale to negotiate with wholesalers and producers for the goods it sold.

Competitors such as Woolworths’ Metro60 service used Uber workers with no right to a minimum wage and tapped into the grocery chain’s supply network.

Woolworths deal

Milkrun failed when its investors declined to tip more cash into the business, which was rapidly depleting its reserves and losing money on each order, according to leaked investment documents from the time.

Woolworths bought the brand for what sources estimated was “about $10 million” in a transaction announced in May to be absorbed by its Metro60 service. Neither side would comment on that figure.


Taking into account its debts to suppliers, liquidation costs, term deposits and refunds owed by authorities for taxes and workcover premiums, Cor Cordis said Milkrun would be wound up with a surplus of about $4.1 million.

But that only factors in Milkrun’s trading entity. Its holding company, which typically receives the investor funds and holds intellectual property, is separate. If it received the proceeds from Milkrun’s brand sale, investors could reap closer to $14 million.

Mr Milham held ordinary shares in the business while investors had preference shares, so they will be paid out rather than him.

Cor Cordis declined to comment, as did AirTree. Mr Milham was contacted for comment and the Atlassian co-founders’ Grok Ventures and Skip Capital declined to comment.

Nick Bonyhady is a technology writer for the Australian Financial Review, based in Sydney. He is a former technology editor, industrial relations and politics reporter at the Sydney Morning Herald and Age. Connect with Nick on Twitter. Email Nick at

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