Perhaps calling is a 'rich person's bubble' would be a better way of phrasing it. I don't think Munchery has a chance in hell of ever going public and getting retail investors snared.

I think the more interesting aspect of this story is similar to the kinds of armchair quarterbacking that goes on here, but with people who have investment funds.

So the 'Food as a Service' segment has had some recent traction. There are lots of new companies pursuing it from a variety of angles. The previous standard might be Marks & Spence a grocery chain in the UK which provided much of their product as pre-packaged ready (or nearly ready) to eat meals, this was picked up by folks like Trader Joes in the US and some other higher end markets.

The business story is pretty simple, on the side of people with no disposable income they shop at big box stores and make everything at home, at the really high end the food preparation is outsourced to favored restaurants and in house cooking staff. But in the upper middle where people don't want to "waste time" cooking, and don't want to "waste money" eating out, you have window which you can sell too. And yes, it is very similar to the window that opened up during the dot com boom, people with a bunch of excess cash and little discipline looking to apply it to making their life "better"[1].

The problem is that 'pre-preparing food' is both straight forward and difficult to protect with IP. So we have lots of people jumping in, one or two of which actually have the potential to succeed.[2]

If you're an investor and you are sitting on a pile of cash (and estimates range up to a trillion dollars of cash sitting around doing nothing) you look at the outcomes.

0) You do nothing and sit on your cash (the null hypothesis)

1) You invest and lose everything (the complete fail)

2) You invest in something and get a fraction of a return

3) You invest with a 1:1 return

4) You invest and get a 1:1+ return.

Standard stuff right? So if you can buy into the idea that this market will exist long term, then you know that the way it will come to pass is that several companies will start, some leaders will emerge, they will buy up the losers at a discount (option #2), they merge with mid-tier players (option #2), they emerge to lead the market (#3), or they end up winning the market (option #4). So you "buy in" by investing on one of the players. You have your quants come up with a model which can posit an expected rate of return for a given risk profile, and you dump your money in. Ok so still with me?

Now there aren't too many "new things" so there are a lot of players but not a lot of horses to bet on. That leads to pressure to push the model and consider them optimistically so that you have a chance of being in the race at the finish line. That pushes up valuations, and makes life difficult for founders[3].

If this goes pop (and it will) various VC firms will find it hard to raise a new fund, they will become the 'former VC' (there are quite a few of them). But nobody really cries crocodile tears over a VC having to take a pay cut from $500,000 a year to just $400,000 a year (a 20% cut mind you!).

[1] Not going to digress into defining better but these companies are empirical evidence of a one definition.

[2] Their success is going to depend on the continued largess of this upper middle mostly single or couples with no kids.

[3] Too much money chasing you can lead to some seriously bad decisions as a startup.