Malaysia-based cloud kitchen and food delivery startup Dahmakan has raised $18 million in a Series B funding round backed by White Star Capital, Rakuten Capital, JAFCO Asia, and the GEC-KIP Fund, according to a company announcement.
The successful close of the funding round confirms DealStreetAsia’s report in January that the Y Combinator-backed direct-to-consumer delivery-only food startup was in advanced talks with Tokyo-headquartered Rakuten Capital to raise a fresh funding round that will likely value the company at over $40 million.
Dahmakan 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. Y Combinator and another existing investor, Partech Partners, also participated in the funding round along with Korean food delivery unicorn Woowa Brothers, and the former CEO of Nestle Germany.
Dahmakan, co-founded in 2015 by Christian Edelmann, Jessica Li, and Jonathan Weins, said it will use the fresh funding to continue building its end-to-end operating system, which it said powers the entire value chain from product development to last-mile delivery network of satellite distribution kitchens.
“Our mission from Day 1 was to build a chef-made, food delivery product that supported the selection and price point for the mass market to use every day. We knew, from our experience launching Food Panda in Hong Kong, that removing high delivery and operating costs, while bringing food closer to the consumer, would be a core part of this mission” said Dahmakan CEO Jonathan Weins.
According to a 2019 report from Temasek, demand for food delivery has grown rapidly at over 73 per cent annually in SouthEast Asia. Dahmakan said it capitalises on this demand for delivery-only food by servicing multiple satellite kitchen around Kuala Lumpur from one factory-sized cloud kitchen.
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.
The Kuala Lumpur-based startup distinguishes itself from rivals – including Foodpanda, GrabFood, and Deliveroo – by delivering meals prepared in-house instead of picking up from restaurants and stalls.
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. It plans to enter Singapore and Vietnam soon and is understood to have earmarked some plans for its home market.
“Dahmakan is well-positioned to serve the growing demand for food delivery services in South East Asia with its unique, technology-forward approach of taking control of the entire value chain to provide affordable food delivery options to SEA’s rising middle class,” said Eric Martineau-Fortin, Managing Partner of White Star Capital.
Dahmakan raised $5 million in Series A back in May 2019 and a combined $4 million in seed funding.