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People Stiffed By Munchery Shutdown Target VC Firms To Demand Payment

SAN FRANCISCO (KPIX 5) -- When popular San Francisco-based meal delivery start-up Munchery shut down last week, customers, vendors and employees were caught by surprise.

Now some are calling on the venture capital firms that originally backed Munchery's to pay its debts.

Munchery has not officially filed bankruptcy yet, but many believe it's only a matter of time. The shutdown has left customers who still have credits and vendors who are waiting to get paid wondering how they'll get their money.

"$20,000 is a full payroll for us," said Lenore Estrada, who owns Three Babes Bake Shop which provided pies to Munchery.

For Estrada, the Munchery's $20K debt to her company is personal. "I left my baby at home with my husband and worked all night to bake those pies myself," said Estrada, who also says Munchery owes her friends' small businesses at least another $50,000.

Former customers told KPIX 5 they still have hundreds of dollars worth of unused Munchery credit. Former employees have now filed a class action lawsuit in hopes of getting paid.

Consumer attorney Mark Anderson says Munchery will likely have to file bankruptcy, which means consumers and vendors would - at best- get partial payments. When asked whether creditors have a chance of getting their money back, Anderson said, "Not a very good chance."

Munchery hasn't announced how or if it plans to pay its debts. There was no answer at their San Francisco headquarters on Wednesday.

Estrada said not getting her $20,000 is "not really an option for me," she said. "I don't plan to stop until we get paid."

So Estrada and other creditors have turned their attention to the venture capitalists who funded Munchery, placing letters on cars outside Menlo Ventures in Menlo Park.

"The police were called and I was kicked off the property," said Estrada.

Another protest invoved holding a bake sale outside the San Francisco offices of Sherpa Capital.

"We gave away free cookies as long as you did not work for Sherpa Capital, said Estrada.

Still, Anderson says while it may be the right thing to do, it's unlikely the venture capitalists will step up.

"There are tons of other companies that shut down responsibly all the time and pay all their vendors and there are a lot of other investors who make sure that that happens so I'm sort of apalled at the venture capitalists," said Estrada. "For them $20,000 $50,000 is a vacation and for us this is our livelihood."

Many people have offered to help raise money via GoFundMe. But Estrada says she doesn't want the community to have pay for the venture capitalist risk.

We have reached out to both Sherpa Capital and Menlo Ventures and neither responded to our request for comment.


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