Online restaurant gets money from fund managed by SingPost’s ex-chairman

Photo credit: Grain

Despite going through a crisis last year, Grain, a Singapore-based startup that makes fresh meals in its own kitchen and sells them online, has raised an undisclosed sum of money from investors that include Majuven, a venture capital fund founded by Lee Hsien Yang, the brother of Singapore’s prime minister.

Lim Ho Kee, the former chairman of Singapore’s national postal company SingPost, is Majuven’s managing partner.

Grain disclosed these figures related to its 2017 performance:

• 330 percent growth in sales
• Gross profit grew more than 10 percent
• 60 percent repeat customers

Here are some numbers obtained from its income statement as well as from a source familiar with the matter. The person did not disclose earnings for the latest financial year that ended.

Grain has come a long way. It almost ran out of money at one point and was reprimanded by Singapore’s health authority for selling food that caused diarrhea. It later apologized and said it identified lapses in the kitchen that were fixed. The company then hired a new executive chef who ran the kitchen at Google and food caterer Neo Group.

From day one, Grain has been operating on positive unit economics, says the CEO Yong Yi Sung. In other words, its gross profit is in the black, even if you factor in delivery cost.

Right now, Grain only serves customers in Singapore. New investors in this round include food distributor FoodXervices and restaurant group First Gourmet. Existing backers NSI Ventures, Thai Express founder Ivan Lee, and 500 Startups also participated.

The investment will be used to grow Grain’s country-wide distribution network before its series B fundraising. Besides serving individual meal boxes to consumers, Grain also serves businesses like Yahoo, DBS, TripAdvisor, Oldendorff, and Danone.

The company previously raised a series A round worth US$1.7 million, a bridge round of roughly the same amount, as well as some venture debt from DBS Bank.

Can Grain survive the platforms?

Grain’s business model of owning the entire process – from food preparation to delivery – is a brave but difficult choice. Small restaurants often rely on marketplaces like Uber Eats and Deliveroo to do deliveries for them. Only big restaurant chains can afford to send out their own riders.