Malaysian cloud kitchen start-up, dahmakan, has bagged a US$5 million series A funding, which will be used to drive growth in existing and new markets. These include launching new distribution channels such as partnering with food delivery marketplaces and retailers, as well as expanding its own delivery coverage.
In a statement to A+M, co-founder Jessica Li said it is looking to expand into two other Malaysian cities in the third quarter of 2019, and Singapore and Jakarta shortly after. While some of the funding will be allocated to marketing, Li said that it will continue to focus and invest significantly into improving the product and customer experience.
“From what we’ve seen, referrals continue to be our strongest marketing channel but we are testing a lot of different things currently, such as radio and partnerships with key F&B brands, which is exciting,” Li said.
Besides regional expansion, it also aims to boost the talent within its leadership team. She added that dahmakan is looking to add senior engineering and product talent to its HQ team, as well as operational and marketing leads to its team in Thailand. Headquartered in Malaysia, dahmakan expanded into Bangkok last year with the acquisition of Thai food delivery service Polpa.
The latest round of funding brings the total funding to approximately US$10 million. The investment comes from existing and new global investors including Silicon Valley fund Partech Partners, China’s UpHonest Capital, and a follow-on from Y-Combinator, Atami Capital and private investment from the former CEO of Nestle.
According to CEO Jonathan Weins, the company has developed an operating system that “drastically reduces” the traditionally high cost structure of food delivery. The technology allows dahmakan to deliver better quality food at more affordable prices compared to other on-demand food delivery startups while maintaining a higher profit contribution margin, he said.
We’re applying predictive analytics including machine learning to forecast sales and in food product development. Our proprietary routing algorithms and AI-powered operating system automates 80% of workflow in both the food production and delivery, solving essentially, an on-demand food manufacturing problem,” Weins added.
Meanwhile, dahmakan’s digital canteen programme, a corporate food delivery offering, is set to launch across 1,800 offices in Klang Valley in 2019. Founded in 2015 and acquired by Delivery Hero in 2016, dahmakan aims to make food delivery an affordable experience for office workers in Southeast Asia. Last year, it unveiled a new brand of lower-priced dishes which are said to be 30% more affordable than their initial starting price point in 2016.
It also launched distribution “satellite” kitchens in Malaysia, capitalising on the demand for delivery-only food by servicing multiple satellite kitchen around Kuala Lumpur from one factory-sized cloud kitchen, making it more faster and more cost efficient to scale.