Slow, measured execution by 4-year old startup, Delivereat, secures it US$450k
By Karamjit Singh February 28, 2017
- Gobi Mavcap’s Asean Superseed Fund lead investor in pre-series A round
- Food delivery service spent 4-years honing capabilities in Penang, ready to expand nationwide
PROVING that there are exceptions to the startup mentality that speed is all critical to gain market share and scaling regionally, Penang-based food delivery service, Delivereat, has spent four years honing its execution and business skills in the idyllic island state with a population of around two million.
That slow, un-sexy and measured approach has paid off with Delivereat raising US$450,000 (RM2 million) in Pre-Series A funding in a round lead by Gobi MAVCAP’s ASEAN Superseed Fund, with Gobi highlighting its execution capabilities.
“I like the fact that the team has been very focused on making sure it works in Penang, rather than expanding rapidly with too much risk taking. To be able to compete in a competitive market, you need certain level of discipline and not being distracted by other market noises. For that, I think the team has done well even though this is not a new business model powered by some high tech,” says Victor Chua (pic, right), Gobi Partners’ Vice President of Investment in Asean.
Founded in November 2012 by the husband wife team of Leong Shir Mein and husband, Tan Suan Sear, Delivereat started with two restaurants and today has more than 200 restaurants in Penang including local favorites such as Pelita Nasi Kandar, Sin Nam Huat Chicken Rice and Old Town, as well as international brands such as Nando’s, Sushi King, Chilli’s and Subway. They currently serve more than 40,000 customers a month in Penang, an internationally known food paradise recognized especially for its famous street food.
With the funding, Delivereat is looking to expand its services to other cities in Malaysia, provide better benefits and welfare for their employees, and also increase their marketing exposure for merchants.
“We believe in providing great service to our customers by giving them convenience, coupled with a great variety of meals in different price ranges. We know that there are days when customers may want to treat themselves and days where they may want to be a bit thrifty when it comes to food. Thus, we wanted to cater to all those different needs, whilst also ensuring that the meals delivered are fresh and have the same high quality standards you’d expect when eating out at a restaurant,” said Shir Mein.
“Our investment exposure in the food sector will be a pillar of support for the company’s expansion into new cities and its vision to be profitable,” says Chua who points out that quite a number of Gobi investments were actually in companies that started in one market, with most eventually scaling beyond their home market. “The important factor is the transferability of the business model,” he says. But first up for Delivereat will be winning in its home country first before it tackles its neighbouring markets.
Previous funding received by Delivereat include pre-seeding funds by CHI, as well as Cradle Fund (CIP 150 and CIP 500). The company was also selected as one of the top 20 finalist companies in Alliance Bank’s Biz Smart Academy SME Challenge in 2014, and in the same year was also picked as one of 20 startups by MAGIC for the [email protected] programme.
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