Membership Feast quietly pivoted to catering and left its client prospects in a lurch – TechCrunch


A 12 months in the past, Membership Feast, a subscription-based service aiming to disrupt the meals supply business, emerged from stealth with $3.5 million in seed funding and the backing of outstanding buyers, together with Normal Catalyst and Pika Capital. Co-founders Atallah Atallah, Ghazi Atallah and Chris Miao claimed that, by working with lots of of eating places to create low-priced meals, they may provide supply that solely price $5.99 per dish plus a $2 supply price (and a $1 price for single-meal orders).

The enterprise seemed to be going sturdy, even hiring journey bloggers for promotional spots on TikTok. However earlier this 12 months, subscribers began seeing greater tabs and charges. Then, inside the previous couple of months, Membership Feast ditched its client providing utterly in favor of company catering, leaving its unique prospects with meal credit that they are saying they will’t use.

“The marketed value didn’t final lengthy, and by the point I ended utilizing the service, the costs had been the identical as Seamless and Uber Eats,” one former Membership Feast person informed TechCrunch by way of Twitter. “I’d actually look within the [mobile] app and the value was totally different. Then they tried to say it was due to rising costs of components, and so on., [but] the difficulty for me was lack of transparency and accountability.”

Low-cost meals supply

At launch, Membership Feast had diners join a weekly meal plan and reserve lunch or dinner orders a number of hours forward of time. Subscribers received a set variety of meal credit, which may very well be topped up, paused or spent at any time. Membership Feast’s restaurant companions supplied 4 or 5 meals to select from, which got here to between $8.50 and $9 with the charges factored in — or much less for patrons enrolled in a $7.99-per-month “Feast Go” plan that did away with supply charges.

The thought was to provide eating places an estimate of buy quantity so they may plan forward and prepare dinner economically — passing the financial savings on to diners. Whereas operators accepted decrease revenue margins on Membership Feast meals, they did so with the expectation that greater order volumes would make up for it. Membership Feast’s bike-riding supply drivers, too, had extra predictability than with on-demand ordering platforms within the sense that routes had been chosen for “effectivity” and meals had been dropped off on an everyday schedule.

In a January 2021 interview with TechCrunch, Atallah Atallah stated that — whereas Membership Feast may finally introduce higher-priced fancier meals — the bottom value level would stay intact. “We need to ensure that doesn’t have an effect on the $5.99 idea,” he stated.

There was purpose to imagine Membership Feast would maintain its promise. Atallah Atallah can also be a co-founder of restaurant rewards firm Seated, which claims to have introduced in tens of tens of millions of {dollars} in income for its restaurant companions. And Membership Feast was on an growth tear for a 12 months, including New York Metropolis and the bigger Bay Space to its supply zones after working pilots in San Francisco and San Mateo.

However the calculus modified sooner or later. By mid-2021, meal costs had elevated to $6.99. Then Membership Feast began tacking on an 18% service price and tweaked its supply mannequin: Clients might go for quicker deliveries in trade for variable charges ($0.49 to $3).

ClubFeast

Membership Feast’s web site as of August 3. Picture Credit: Membership Feast

Companies alter pricing on a regular basis — particularly in a tough market the place subscriber development is vital. That’s common. Simply final month, DoorDash elevated the minimal order measurement without spending a dime supply. However the place Membership Feast went mistaken was its failure to be proactive about informing of pricing modifications, in response to the purchasers who spoke with TechCrunch.

One buyer stated that they noticed the value of an entree enhance to $8.50 in February; an merchandise at one other restaurant had risen to $9.99 by early March. A second buyer stated that they had been repeatedly charged a better supply price even after they opted for a wider supply window.

It’s round this time that some supply folks for Membership Feast complained on social media that they weren’t being paid in a well timed method for additional deliveries on prime of their scheduled routes. One stated that Membership Feast promised to ship a log sheet, however by no means did. Others lamented the shortage of cost historical past, estimates of wages per shift and tip visibility within the app.

Membership Feast — maybe on the hunt for different strains of enterprise — started selling large-format group and household orders. A couple of months into 2022, prospects discovered they couldn’t use their credit to put dinner or weekend orders. Quickly, they couldn’t place any orders in any respect.

A shift in enterprise mannequin

A number of prospects inform TechCrunch that the app and web site mysteriously stopped working in June. Those that’d bought meal credit couldn’t use the credit. Some obtained full or partial refunds, however others proceed to be charged for his or her weekly subscriptions and haven’t been capable of shut their accounts.

“I attempted to achieve out [to customer service], and was informed my subscription has been cancelled and refund processed … I didn’t get my refund,” one buyer informed TechCrunch by way of electronic mail. “I reached out once more and was informed as soon as once more that my refund has been processed and I must be affected person … If the aim is to make it troublesome to get a reimbursement so folks will stroll away, it has succeeded.”

This reporter tried repeatedly — and failed — to join a brand new Membership Feast account. The corporate’s FAQ displays the outdated enterprise mannequin, however Membership Feast’s homepage has been rebranded with commercials for brand new (as of July) company catering providers: $60 per 30 days per worker for one meal delivered each week as much as $300 per 30 days per worker for 5 meals per week.

In the meantime, subscribers say the customer support chat perform in Membership Feast’s app has stopped working.

In a latest interview with Meals on Demand Information, Ghazi Atallah stated that the plan was to scale Membership Feast to new markets all through 2022 and into 2023. It’s unclear whether or not that’s nonetheless within the playing cards, pivot or no.

Job postings for catering supply drivers at Membership Feast stay open on numerous boards, and the corporate’s LinkedIn web page lists greater than 100 workers. Membership Feast considerably lately secured capital, too, final Could elevating $10.25 million from Normal Catalyst, Grishin Robotics, Fashionable Enterprise Companions, Eric Feldman and Pika Capital in a “seed II” spherical to carry its whole raised to $13.75 million.

When reached for remark by way of LinkedIn, Atallah Atallah claimed that Membership Feast has made an effort to refund any buyer who made a request and stated that anybody who didn’t really feel they received their a reimbursement can electronic mail him personally.

“[Refunds] took a number of days for Stripe processing … the delay [also] might need been from their financial institution processing, which created some confusion,” he stated. “As for the pivot, it’s extra of us focusing extra on our company shoppers as we have now seen huge demand for meals as a profit for the will need to have perk for return to workplace. Our value level makes it accessible for any firm to supply nice scrumptious meals for his or her crew members whereas supporting native eating places. We grew the business-to-business enterprise by over 600% within the final six months.”

Membership Feast’s messy change in route comes at a turbulent interval for the broader meals supply business. This week, Simply Eat Takeaway was pressured to jot down down the worth of GrubHub by billions only a 12 months after shopping for the group. A promising hospitality-focused meals supply idea, Butler, abruptly shut down earlier this 12 months. And in early July, ChowNow laid off round 100 workers in what the CEO known as a response of worsening capital circumstances.

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