June 8 will be the last day of Menu.ua food delivery service if the Armenian company Menu Group does not find a buyer. The editor of AIN.UA found out the price for which the owners are trying to sell the company.
The price
When asked by AIN.UA editor how much the company hopes to get from the sale of Menu.ua, Kerobyan did not answer.
According to AIN.UA sources, Menu Group did offer this asset to several potential buyers for $500,000-$700,000. However, so far, no agreements have been reached with any of them.
Previously, in an interview with Retailers, Kerobyan said that Menu Group was negotiating the sale of Menu.ua with 3-4 Ukrainian companies, including a large chain of supermarkets.
However, according to sources of AIN.UA, the company will hardly have time to sell the service before June 8, as none of the potential buyers has shown any interest in the acquisition of the above asset. Therefore, the option of closing the business is more probable.
According to one of the sources in the market, the price of half a million dollars is unreasonably high. “There’s no point in buying the database and the application. The first one can be obtained through aggressive marketing, while the second one can be developed in 1-2 months,” said the source of AIN.UA. He also says that Fozzy Group (Silpo) should not be considered as a potential buyer since the company has its own quite successful delivery.
What are the achievements of the service
The service has been operating in Ukraine for just under a year. According to its owners’ estimates, Menu.ua has covered 1% of the market.
During that time, Menu.ua has attracted 200 partners in Kyiv and Dnipro, including KFC, a fast-food restaurant chain. However, some of them broke up the cooperation, as Menu.ua has not made payments on orders for several months. The total amount of debt is $220,000.
Menu.ua has its application and aggregator Eda.ua, which works in 25 cities in Ukraine. The total number of employees is about 50 people. Now the fate of the Ukrainian team looks vague.
“We hope that most people will keep their jobs if the company is successfully sold. Otherwise, to our great regret, they will have to search for a new job,” said Vahan Kerobyan, the founder and CEO of Menu Group.
Why didn’t Menu.ua succeed?
Menu Group is developing a similar service in Armenia and Belarus. Moreover, according to Karobyan, there was a significant growth during the quarantine period – by 50% in February and March. But Ukraine has remained unprofitable all the time. The founder blames not the competitors – Glovo, Uber Eats (closed on June 3), or Raketa – but the lack of funds.
“Our business is very capital intensive. To succeed, we need big investments, even in the non-competitive market.
We could not ensure the required investments for our Ukrainian subsidiary. And after the beginning of the pandemic, it became clear that we will not be able to attract investments quickly,” he explained to AIN.UA.”
The company planned to attract $15 million of investments before the quarantine and invest most of them in the development of the Ukrainian market. However, the deal did not take place due to the crisis.
Besides the Ukrainian service, Menu Group also closes the food delivery service in Georgia. There are curfew restrictions in the country due to the pandemic, and the restaurants cannot work for delivery there. In the future, the company intends to focus on markets where its services are profitable, thus getting rid of reliance on external investments.
