Gourmet food delivery service CoLab has unfortunately collapsed into voluntary administration after failing to secure financing to continue operating. The start-up, which was launched in August 2022, provided ready-made meals, drinks, pantry staples and produce from restaurants, cafes and bars, including gourmet options, delivered directly to homes throughout Australia.
Co-founder and CEO Josh Abulafia conveyed the news that the business had entered voluntary administration through a LinkedIn post. “It’s been a tough day for CoLab and unfortunately we have had to let the team go,” he wrote. Abulafia went on to explain that the company had been in the process of closing a new round of financing that ultimately fell through. Despite receiving significant interest for acquisition, they decided to put the company into voluntary administration due to unforeseen events that truncated their timelines.
Ernst and Young administrators Morgan Kelly and David Kennedy have been appointed to assume control of CoLab’s affairs and take possession of its assets. At the end of March, the administrators stated, “This includes seeking proposals for an urgent recapitalisation of the Group or the purchase of the Group’s business and assets. At this stage, the Administrators intend to continue to trade the Group on a ‘business as usual’ basis.”
Abulafia took a moment to praise the start-up’s team, commending their contributions to achieving “profitability on the first order including customer acquisition cost”. He also mentioned that the company had been able to improve its retention substantially and quickly launched a new B2B business line, which looked promising to hit profitability by year-end at a company level.
The CoLab CEO also ensured that the company would assist in finding new jobs for all of the staff affected by the collapse. “None of this is to do with us; it is the collective achievement of the whole team. I can hand on heart say that you would be lucky to work with any of these people,” Abulafia remarked.
This unfortunate news comes on the heels of fellow start-up Milkrun’s decision to shut down, with its ultra-fast delivery service ceasing operations from Friday onwards after deteriorating economic and capital conditions. Founder Dany Milham conveyed in an email to staff, seen by the Australian Financial Review, that the company had sufficient cash to pay staff and suppliers out in full. Milham stated that the company had always been committed to doing things the right way and winding down the business while still having a sufficient cash balance allowed them to ensure their people and suppliers were paid in full.