Over the past few years, dahmakan has solidified itself as one of the most recognisable names when it comes to healthy food delivery in the Klang Valley.

Since their launch in KL in 2015, they’ve since expanded to Bangkok and now delivery tens of thousands of meals monthly.

Today, they’ve announced a successful series A funding round, raising a total of USD5 million (approximately RM20.93 mil).

The investment comes from existing and new global investors including billion-dollar Silicon Valley fund Partech Partners, China’s UpHonest Capital, and follow-on from Y-Combinator, Atami Capital and private investment from the former CEO of Nestle.

“We have looked at different companies in the space in Silicon Valley, Europe and Asia. dahmakan clearly stood out due to its unique operating system that orchestrates all parts of the value chain,” said Nicolas El Baze, General Partner at Partech Partners.

“The company has reached a crucial inflection point as the system is now ready to expand fast into other markets in Asia.”Nicolas El Baze, Partech Partners

This round brings dahmakan’s total funding to close to USD10 million.

dahmakan positions itself as a vertically integrated, delivery-only food business, servicing multiple satellite kitchen around Kuala Lumpur from one factory-sized cloud kitchen. This makes it more faster and more cost-efficient to scale.

Dictionary Time: Vertical integration is when a company controls more than one stage of the supply chain—the process businesses use to turn raw material into a product and get it to the consumer.

“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 Jonathan Weins, dahmakan’s CEO.

Built On People And Tech

One of dahmakan’s edges is its operating system that reduces the traditionally high cost structure of food delivery.

“The technology allows us to deliver better quality food at more affordable prices while maintaining a higher profit contribution margin,” said Jonathan.

“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.”

But even the best technology cannot substitute having a good team to run it, and this is something dahmakan has also learned in their 4-year journey so far.

Image credit: dahmakan

Speaking on a painful lesson picked up along the way, Jessica Li, co-founder and COO said, “[We used to] hire for experience rather than attitude. We made this mistake a few times early on when we ignored red flags for cultural fit and attitude and it never turned out well. Now our recruitment process has a robust cultural fit assessment which weighs equally, if not more, than the skills component for scoring a candidate.”

With that said, on the back of this funding, their expansion does mean that they’ll be hiring more people.

They’re also in the midst of building a customer loyalty programme, which would be a nice bonus for regular customers.

We asked for a bit more insight behind the successful round, and Jessica told us that is was dahmakan’s continued revenue growth in all markets and consistently improving profit margins as they scale.

“I think investors are excited because we have been delivering on what we promised but at the same time have took a couple of moonshots which have paid off,” she said.

As advice to young entrepreneurs who would also want to follow their route, Jessica tied it back to what is often preached at Y-Combinator: Just to make something people want.

“It’s easy to get sidetracked doing all the nice to have things or playing startup but at the end of the day, if you’re not working on making your product better then you’re probably on the wrong track.”

[Source: “Dahmakan Raises RM20.93 Mil In Funding, Here’s Whyd Investors Got Excite” published by Vulcan Post]

Photo Credits: Vulcan Post

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