'Devastated, defeated': Founder of Kiwi startup 'Eat Local' closes, points finger at Aussie venture

The founder of Kiwi startup Eat Local NZ says he's "devastated" and will have to close after losing an international partnership - but the Australian company involved says they're confused and saddened by his "misrepresentation". 

CEO and co-founder of Eat Local NZ Tim McLeod began the business during COVID-19 alert level 3, hoping to help the struggling hospital sector deliver food without being charged brutally expensive commission from apps like Uber Eats. 

"We came up with Eat Local NZ to empower venues and put more money into the pockets of the restaurants by keeping our fee as low as five percent," McLeod announced in April, ahead of the app's May launch. 

"It's more important now than ever that we do all we can to support our local cafes and restaurants with one in three at real risk of not surviving until the end of the year." 

But plans to expand the venture have been hit hard. McLeod wrote in a lengthy Instagram post on Friday he was "devastated" to announce it was the last day of operation "unless I am able to find some way out of our current situation". 

McLeod said he was approached by Melbourne-based food delivery website Mr Yum to form a partnership. 

"They believed in our values and our mission to help NZ small businesses, support Kiwis who've lost jobs, lift delivery drivers above minimum wage and create a new New Zealand," McLeod wrote. 

"After unsuccessful attempts to unite NZ-based tech businesses, we were excited to find a business so close to NZ that appeared to share our values." 

In his Instagram caption, McLeod said they spent four weeks building to "an exciting relaunch" with the Aussie company this month, before being "locked out" of the company's platform. 

"On Sunday they emailed saying they are going to enter NZ without us, and then offered to buy Eat Local for AU$10,000," he wrote.

"They say they feel they're misaligned with our business values. In my opinion, it seems pretty clear they can make more money without us and social programs like Local Legends; and we have become increasingly vulnerable over the past four weeks.

"We gave them all of our venue data to migrate, our team spent hundreds of hours setting up venues on the Yum platform and so much more. We announced our partnership to our 800 venues and showcased all the exciting new benefits this partner offer."

"Saddened and misrepresented"

But Mr Yum co-founder Kim Teo told Newshub they felt the facts had been "misrepresented" and they were initially excited to support Eat Local NZ, especially with a third of their team being New Zealanders. 

"We were excited about working with Eat Local NZ and we're equally disappointed that we could not reach an agreement," she told Newshub. 

"It is a shame that we couldn't find a mutually agreed way forward. We are as disappointed as anyone. We feel however that Eat Local NZ has misrepresented the facts. We're not sure why they've done this as we felt as though we had ended things on pretty good terms.

"We're saddened by this response to what was two teams working in good faith and sharing learnings and information with each other."

Teo explained the company felt McLeod had made several false statements, including that it they contacted him in the first place, claiming he in fact he reached out over Linkedin. Newshub has seen evidence to support this.

Teo also refutes the claim they have access to Eat Local's codebase, venues or customers. 

"When it became more apparent over time that our visions for the platform and offering for venues weren't aligned, we gave the Eat Local a couple of options to part ways respectfully," Teo told Newshub. She said this included a complete parting of the ways for Eat Local to continue their venture solo, or otherwise a revenue share "significant to the $10,000 mentioned in the post". 

"We called Tim yesterday to try to resolve this, and when we couldn't get on to him, we sent an SMS asking for him to call us back. We didn't hear back," she said.

"We have deleted the contact list of venues from Eat Local NZ, and we have never been in contact in the venues directly."

Mr Yum has also been trading in New Zealand prior to negotiations over the partnership began. 

In his Instagram post, McLeod said he and his team don't know what they'll do next, "but I owe you all the transparency of this message for now at least". 

His post has attracted supportive comments from New Zealanders and local businesses offering to help.