Malaysian cloud kitchen startup Dahmakan is in advanced talks with Tokyo-headquartered Rakuten Capital to raise a fresh round of funding, industry sources familiar to the development told DealStreetAsia.
The transaction, if it fructifies, is likely to peg the valuation of the food delivery startup at over $40 million.
While Rakuten is likely to come in as the lead investor, the company is also in talks with a bouquet of other investors to raise the funding that will help it expand its operations across Asia.
Rakuten Ventures did not reply to DealStreetAsia’s query while Dahmakan denied the development. “This is not true, we have not raised another round, and will let you know when we do.”
So far, Dahmakan has received funding worth over $10 million from leading investors across Asia, Europe, and the Silicon Valley.
It is the first Malaysian startup to be backed by Y Combinator, the American seed accelerator that invests in select startups in two batches every year.
In an exclusive interaction with DealStreetAsia last year, Dahmakan co-founder and CEO Jonathan Weins had laid out the startup’s aggressive expansion plans.
He had indicated that Dahmakan would foray into Indonesia by the fourth quarter of 2019. However, that plan seems to have been delayed and experts tracking the company now say it is now likely to enter the archipelago over the next few months.
The startup is also looking to enter Singapore and Vietnam in due course of time, and is understood to have earmarked some plans for its home market, said sources privy to the current fundraising plans.
Dahmakan was established in Kuala Lampur in 2015. As Weins had put it earlier, the aim was to make food delivery affordable and convenient to its customers through the use of artificial intelligence in logistics and cooking automation.
The startup currently serves over 300 different dishes on a daily basis thus enabling its customers to order through their mobile app or web and accordingly get the delivery done at their doorsteps.
Rakuten Capital is the venture capital arm of Japanese electronic commerce and online retailing company Rakuten Group. It has clocked investments in over 60 companies including ride-sharing companies Lyft and Cabify, headquartered in the US and Spain, respectively. In Malaysia, it has an investment in the used car marketplace, while in Indonesia its portfolio companies including ride-hailing giant Gojek.
Cloud kitchens, that refer to fully-equipped shared spaces for restaurants operating as takeaway outlets with no dine-in facility, are not particularly new to the Asian market. They are mushrooming in hordes and are increasingly evincing investor interest.
Earlier this month, Southeast Asian ride-hailing decacorn Grab launched its first cloud kitchen GrabKitchen in Singapore. According to a statement that the company released, Grab currently has as many as 50 cloud kitchens across five Southeast Asian markets including Indonesia, Vietnam and Thailand.
Among deals that have been sealed in the sector, Gojek last year invested as much as $5 million in an Indian cloud kitchen company called Rebel Foods. Meanwhile, Indonesian venture capitalists Intudo Ventures and SMDV, too, made headlines for making an investment in local catering business Yummy Corp.