After funding, HappyFresh chops off Manila and Taipei to prep for profitability

Photo credit: HappyFresh.

Nearly one year has passed since HappyFresh raised a US$12 million series A round to expand its on-demand grocery delivery business across Southeast Asia and Taiwan.

Today, the startup announced it’s raised a new round of funding.

New investor Samena Capital led the round. The private equity firm traditionally backs offline retail businesses. Its footprint reaches across the Middle East, North Africa, India, and Southeast Asia. Existing investors including Vertex Ventures, the venture arm of Singapore-based Temasek group, Sinar Mas Digital Ventures, as well as Endeavor Catalyst also joined in.

HappyFresh co-founder and CEO Markus Biehler wouldn’t say much about the size of the investment other than it’s bigger than the previous round. “We don’t want to deter from the core message, which is that we are working with great new investors while old investors show their continuing support.”

Doubling down on the primary markets

Markus says HappyFresh’s current round is going primarily into developing its tech.

Further geographic expansion isn’t in the cards at the moment, on the contrary: the startup is cutting back in Taiwan and the Philippines to zoom in on its major markets Indonesia, Malaysia, and Thailand. “There will be – very unfortunately – layoffs in both Taipei and Manila,” Markus says.

The focus now is on building a “sustainably profitable” company.

Across its markets, HappyFresh has 300,000 customers, a solid 80 to 85 percent of whom are repeat customers, Markus says.

He wouldn’t reveal how much HappyFresh customers typically spend on purchases through the app, but shared three observations: on average they spend more on one purchase than offline shoppers, they tend to buy products with a higher margin, and the basket sizes usually increase with repeat orders.

Groceries’ holy grail

HappyFresh, at first glance, is barely distinguishable from other grocery delivery startups like RedMart, Honestbee, or even Indonesia’s Go-Jek, which does on-demand shopping next to a variety of other services.

Markus Biehler, HappyFresh co-founder and CEO.

However, there are vast differences in how these startups operate.