Delivery service Menu.ua leaves Ukraine with $220k in debts to its partners
June 3 was the last day of Uber Eats’ work in Ukraine. But this is not the only player in the food delivery market in Ukraine, which could not gain a foothold on it. Vahan Kerobyan, an investor of Menu.ua (formerly Eda.ua), also announced his plans to close the service, as reported by Retailers.
Armenian company Menu Group entered the Ukrainian market in July 2019 through the acquisition of aggregator Eda.ua. The delivery service based on it was launched in Kyiv in October with the brand name Menu.ua. At the end of February 2020, it was scaled up and started operating in Dnipro with free delivery.
Last summer, the founder and CEO of Menu Group Vahan Kerobyan estimated the Ukrainian market of food delivery at ₴10-15 billion with annual growth by 20-25%. Soon after the acquisition of Eda.ua, he announced his intention to invest ₴100 million in Menu.ua.
According to Karobyan, his company acquired the aggregator Eda.ua for $1 million by exchanging shares. After that, more than $1.5 million was invested in the development of services in Ukraine. This amount includes debt repayment costs that Eda.ua had.
Plans have changed
Several partners of Menu.ua reported to Retailers that the service had not paid money for orders for a couple of months. Journalists of the media contacted Kerobyan for comments.
It turned out that the board of directors of Menu Group decided to stop investing in Ukraine, and they are considering two options for further developments now: closing the company or selling it. The final decision on this issue will be made on June 8.
Kerobyan also says that debts to partners of $220,000 will be paid within a few months.
Coronavirus has changed everything
According to Kerobyan, currently, Menu.ua covers less than 1% of the food delivery market, while over 50% is in service of restaurants with delivery.
Nevertheless, the company did not plan to leave Ukraine before the quarantine. Menu Group was preparing to attract $15 million of investments and direct most of them to the development of service in Ukraine, in particular, the opening of dark stores that work only for delivery.
“When the situation with coronavirus happened, we realized that we do not have the necessary resources for further development in Ukraine,” said Kerobyan in a blitz interview with Retailers.
According to him, during the quarantine period, Menu.ua had slight growth. Nevertheless, the company was unprofitable. They had to invest more than $100,000 in the service every month. He also says that the Menu Group will leave Ukraine with losses.
“We do not see profitability in Ukraine in the near future. Maybe this is due to the fact that we do not know this market well,” he added.
What will happen to Menu.ua
If there is a buyer before June 8, the service will be sold. Otherwise, Menu.ua will just close.
According to Kerobyan, 3-4 companies in Ukraine have expressed interest in the acquisition of the service.
“I cannot disclose the names, but one of the potential buyers is one of the largest supermarket chains in Ukraine. If the deal goes through, there will be a third quite strong player in the segment of food delivery in Ukraine,” he said.