“A no-brainer”: Ready-made meal platform Efoodz buys CoLab out of administration

Gourmet ready-meal and pantry goods delivery service CoLab has been rescued from voluntary administration by a Melbourne-based meals platform that was founded during the COVID-19 pandemic.

Efoodz managing director Andy Lam confirmed to SmartCompany this morning that his business has acquired the assets of CoLab and intends to continue running the business as usual, while focusing on improving its profitability.

The cash deal, the price of which is undisclosed, includes CoLab’s intellectual property, digital infrastructure, technology, database and some assets from CoLab’s Melbourne and Sydney offices.

On Monday, small businesses that supplied their products to CoLab were informed of the sale via an email from administrators at Ernst & Young, and told the new owners may want to speak to them about once again stocking their products.

In that email, seen by SmartCompany, EY administrators Morgan Kelly and David Kennedy said they expect the sale to be completed by April 28.

Three weeks ago, those same suppliers were asked to collect unsold stock from CoLab, following the appointment of Kelly and Kennedy on Monday, March 27. The remaining stock that was supplied to CoLab on consignment will be transferred to the new owners.

“Unforeseen events”

Officially launched in August 2022, CoLab was formed by the merger of Sydney-based ChefPrep, which delivered restaurant-made meals for preparation at home, and Co-Lab Pantry, a Melbourne platform that sold high-end produce from boutique producers.

CoLab customers could order ready-to-heat bao, pizzas, dumplings, and curries, from restaurants including Farro, South Yarra Deli, and Oriental Teahouse, as well as condiments from the likes of Entrecôte, Chotto Motto, and Fancy Hank’s.

The business was led by ChefPrep co-founders Elle Curran and Josh Abulafia, who raised nearly $6 million in funding in the 12 months leading to the Co-Lab Pantry acquisition, with Avin Chadee and Natasha Buttigieg of Co-Lab Pantry stayed on for the new combined venture.

In early April, Abulafia said the business’ administration was caused by the withdrawal of extra funding commitments and CoLab was “in the process of closing out a new round of financing that fell through”.

“We then had a significant interest for the company to be acquired and decided to put the company into [voluntary administration] to help, but due to unforeseen events our timelines became truncated,” he wrote on LinkedIn at the time.

While the founder said the administration was directly linked to this financial setback, it came at a time when the food delivery sector was facing increasing pressure. Within days, VC-backed rapid grocery delivery platform Milkrun announced it would also be closing.

“A no-brainer for us”

Speaking to SmartCompany after arriving in Sydney to meet with CoLab staff, Lam said the acquisition was sparked by an opportunistic email.

Efoodz had been supplying its ready-made meals to the CoLab platform and when the administrators emailed Lam to ask what he wanted to do with the unsold stock, he sent a simple reply asking if the business was for sale.

“That kicked things off in terms of discussions and negotiations,” says Lam.

Around 16 CoLab employees have been made redundant as a result of the administration and while Lam has spoken to some of them, he unfortunately doesn’t expect they will rejoin the business.

Lam and his team also plan to move away from the consignment model previously used by CoLab and will instead likely buy stock directly.

“With everything that’s happened, the relationships have been tarnished and burned and suppliers will be reluctant to hand over stock again. So we will probably have to change up the model,” he says.

The Efoodz business will continue to operate separately from CoLab and the acquisition isn’t necessarily a sign that Efoodz is changing direction. Rather, Lam says, “from a commercial perspective, it was a good opportunity for us to acquire another business”.

“We’ve got the team [and] the facilities here, so it was a no-brainer for us,” he adds.

Efoodz was launched in 2021, when Melbourne was in the depths of lockdown, with a goal to shake up the food delivery space by offering “healthy, convenient and high-quality meals” to customers, according to the company’s website.

Fast delivery was a focus from the start, with Efoodz building its brand on a “kitchen to customer in 48 hours” guarantee. The Efoodz team has now grown to a staff of 35, and the business is preparing more than 60,000 meals a month from its company-owned manufacturing plant. As well as its direct-to-consumer sales, the business also supplies meals to independent retailers and operators in the petrol and convenience category.

“It’s been a good journey so far,” says Lam.