Micro-delivery start-up DailyNinja has raised $3 million in a fresh round of funding from Saama Capital and existing investor Sequoia Capital.
This is the start-up's second round of funding, after it secured $1.5 million in a round from Sequoia Capital in October 2017.
The company had also received seed funding in the past from prominent angel investors from companies like FreeCharge, TaxiForSure, Shaadi.com etc.
DailyNinja exceeds $4.5mn in total funding
Saama Capital justifies funding DailyNinja
"We've been impressed by the way..[DailyNinja] have built significant traction in a very capital efficient manner and with a sound growth strategy. We believe the time is ripe for rapid acceleration...and we believe this is the right team which can execute [it]," said Saama Capital.
Daily Ninja is a micro-delivery start-up founded by BITS alumni
Founded in September 2015 by BITS Pilani graduates Sagar Yarnalkar and Anurag Gupta, DailyNinja is a micro-delivery start-up that operates on a subscription-based model and delivers daily necessities like milk, bread, eggs, curd, dosa batter, cottage cheese and other groceries to customers' doorsteps.
Currently, the start-up handles 25,000 orders daily across Bengaluru and Hyderabad, and expects to increase it to 150,000 in 12 months.
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What lies ahead
Most Indian households buy milk everyday and spend around Rs. 1,000 on it monthly.
However, since profit margins on milk delivery are low, online start-ups like DailyNinja offer groceries too, using milk demand as a hook to get households to use their platform to meet daily necessities.
Additionally, unlike its competitors, DailyNinja doesn't have its own delivery fleet, and relies on milk vendors.
Details about Daily Ninja's current and planned operations
DailyNinja plans to use the fresh funds to expand its business across Bengaluru, Hyderabad, and Gurgaon.
While 2015 and 2016 saw several hyper-local delivery companies including Peppertap, Opinio, Roadrunnr close down, milk delivery model-based companies have survived because of improved operational efficiencies.
DailyNinja currently works with 385 milk vendors to make the deliveries between 4 am and 7 am, which helps trim operational expenses.
DailyNinja has low costs despite a relatively large scale
"High logistics cost killed many of the hyper-local companies around 2015 and 2016. However, we have been able to maintain a low operational cost. When we were doing 10,000 orders a day, our burn was about Rs. 15 lakh a month," said DailyNinja CEO Yarnalkar.
DailyNinja has several competitors, but seems to be ahead
DailyNinja is the latest among micro-delivery start-ups to receive attention in terms of funding.
Around a month back, its competitor Milkbasket raised $7mn in a Series A round.
Yet, DailyNinja's competitors seem to lagging behind in terms of scale - Milkbasket handles about 8,000 daily orders and SuprDaily about 5,000, according to industry estimates. Doodhwala said it averages 15,000 daily orders.