Malaysia-based cloud kitchen and food delivery startup dahmakan has announced raising $5 million in its Series A funding round backed by existing and new investors, including Silicon Valley fund Partech Partners and China’s UpHonest Capital.
The funding round, which brings the startup’s total funding to close to $10 million, also saw follow-on from Y-Combinator and Atami Capital and private investment from the former CEO of Nestle, the company said in a statement.
dahmakan, which is present in Malaysia and Thailand, announced the close of the Series A round after the launch of its distribution “satellite” kitchens in Malaysia. The fresh capital will be used to, among others, launch new distribution channel and expanding its own delivery coverage.
“We’ve continued to show strong year-on-year growth in Malaysia & Thailand and earlier this year, launched a network of distribution “satellite” hubs that will allow us to increase distribution to customers faster and through other platforms,” Jessica Li, dahmakan’s co-founder, told DEALSTREETASIA.
According to a report from Temasek, demand for food delivery has grown rapidly at over 73 per cent YoY 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.
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.
Dahmakan had raised its pre-Series A round in January 2018 from accelerator Y Combinator, Texas Atlantic Capital, Swiss family office Atami Capital and the former founder of APAX Partners.
The round was followed by the acquisition of Thailand’s food delivery startup Polpa in March. The deal marked dahmakan’s first regional expansion since its launch in 2015.
“This new funding round will allow us to drive growth in existing and new markets including launching new distribution channels such as partnering with food delivery marketplaces and retailers as well as expanding our own delivery coverage,” said dahmakan CEO Jonathan Weins.
The startup also plans to add further talent to its leadership team.
In 2018, dahmakan launched a new brand of lower-priced dishes, which it claims are 30 per cent more affordable than their initial starting price point in 2016.
“This brand has proven popular and has been adopted quickly by over 200 corporate partners in Kuala Lumpur as part of dahmakan’s digital canteen program, a corporate food delivery offering which is set to launch in 1,800 offices across Klang Valley in 2019,” it said.
Nicolas El Baze, general partner at Partech Partners said dahmakan has reached a “crucial inflection point” as the system is now ready to expand fast into other markets in Asia.