Malaysia’s food delivery startup Dah Makan has secured a $1.3 million in a seed round from global venture capital firms NFQ Capital, East Ventures, Asia Venture Group and Grupara Ventures as well as prominent angels including the ex-CEO of Nestlé.
Dah Makan plans to use the seed funds to add more talent to its current 60-member headcount and to set up the next market in the region, it said in an announcement on Monday.
“We started Dah Makan with a vision to make food delivery an everyday choice for customers, similar to how Ikea made designer furniture available to the mass market. From our time at foodpanda, we knew SEA was an attractive market since 70 per cent of meals in this region are takeaway, delivery or consumed outside,” said CEO Jonathan Weins.
The recent funding seems to have brought some steam to the funding crunch in the food tech and grocery delivery industry in the region. In fact, according to a recent report hiring at startups was put on hold as they were waiting to secure funds.
In fact, Dah Makan was in the process of raising funds since last year which only completed recently. In an interview with DEALSTREETASIA earlier last year, Jonathan said, “We are right now finalising a larger round with several global VCs with extensive experience in e-commerce and consumer brands. It’s very important to have the right investors on board as they can have significant influence on the future of a company.”
The team focuses on building a sustainable food delivery business and have developed a system that allows customers to pre-order lunch and dinner up to 45 minutes before delivery through the Uber-like app.
Proprietary routing algorithms developed by the team allows for orders to be efficiently grouped together and bulk delivered. This model, similar to one that Sprig has recently adopted, has meant that each meal delivered since early 2016 has been profitable.
“For over two years, our tech and operations team have worked on solving a stochastic open capacitated vehicle routing problem, one of the hardest problems in computer science.” Christian Edelmann, CTO said.
The range of four daily changing meals, priced between $4.5 – $6 with free delivery, are 40 per cent cheaper than comparable dishes in restaurants and any existing food delivery options, the food delivery firm claims.
The health food delivery startup had earlier raised $320,000 from two angel investors in a seed round over an year ago since when it has grown to cover around 80 per cent of the Klang Valley region in Malaysia and has also crossed its 100,000th delivery.