Dropezy Secures 35.5 Billion Rupiah Series A Funding, Offering Quick Commerce Solution

Online grocery startup Dropezy announced a pre-series A funding of $2.5 million (approximately 35.5 billion Rupiah). This round was led by Forge Ventures with participation from Tekton Ventures, Next Billion Ventures, Nordstar, and a range of angel investors, including the founders of Kopi Kenangan and BukuKas.

Through this round, Dropezy will launch its newest expansion solution “quick commerce” which offers instant delivery within 20 minutes. The company will expand its micro fulfillment center (cloud store) to a dozen at various points throughout the Greater Jakarta.

Dropezy's Co-founder & COO, Nitesh Chellaram said in an official statement, the ongoing pandemic is changing the way consumers shop for daily necessities to online platforms. However, existing online grocery services focus on circling the existing offline supply chain or minimizing costs.

There are some aspects left behind that they have not had time to resolve in fulfilling consumer experience with online shopping, a faster delivery. Dropezy comes with the vision to offer the most convenient way for people to get groceries.

"Dropezy was built from the scratch to satisfy urban consumers who demand convenience and speed that allows them to order daily necessities in small package without a minimum order, with the cheapest delivery rates in Indonesia," Nitesh said, Thursday (23/9).

He said, with this vision, the company now has 60% of repeat customers still shopping at Dropezy after six months. Also, these customers prefer the consistency and freshness of the Dropezy product selection and reasonable prices.

In its business operations, Dropezy controls inventory and logistics in-house with a committed fleet of riders allocating at least 6 hours a day for small package deliveries. This quick commerce solution is available due to Dropezy's consumers demand to send orders faster.

“If you're making coffee and realize you're out of milk, Dropezy will give it to you before your coffee gets cold. We are excited to partner with investors who share our vision and customer obsession.”

In order to support the company's vision, Dropezy has one micro fulfillment center (cloud store) assisted by a total team of 100 people to serve next-day delivery. In realizing the company's ambition to provide 20-minute delivery to the buyer's location, Dropezy plans to open up to a dozen cloud stores by the end of this year.

Dropezy's Co-founder & CEO, Chandni Chainani added, “Expanding from 1 warehouse to 10 is very challenging, and there was no way we could have done this without the 18 months of learning and insight we gained from our customers.”

Forge Ventures' partner, Kaspar Hidayat said, his team is very enthusiastic to partner with Dropezy to revolutionize the online grocery industry. He said, current players are not solving important problems and that is why penetration in this segment is much lower than in the e-commerce industry.

“And Dropezy changed all that. As Dropezy grows, this will allow customers to buy groceries and daily necessities on time, and running out of something essential will be a thing of the past.”

Competition in online grocery industry

The online grocery industry has fierce competition, however, it has high growth space as its penetration is still concentrated in big cities.

A report from Statista said, last year the online grocery market share in this country only reached 0.3%, it is predicted to be increased by 20 basis points to 0.5% in 2022. The pandemic is said to be one of the main factors that triggered the increase in the popularity of online grocery services among consumers.

Based on data, apart from changing consumer online buying behavior, a further impact of the pandemic is a change in consumer mindset in shopping. “Worried about the economic impact of the pandemic, many Indonesian consumers are becoming more budget conscious. In addition, the purchasing  priority  of basic needs and health among consumers is visible during the pandemic," the report said.

Source: Statista

Therefore, instant delivery solutions at affordable costs are increasingly relevant as it holds potential consumer segment. Aside from Dropezy, more online grocery players are concerned with instant delivery. Among them are Sayurbox, which offers delivery within two hours, BlibliMart, which offers same-day delivery for purchases made between 8 am and 4 pm, and HappyFresh which promises delivery within one hour of ordering.

–Original article is in Indonesian, translated by Kristin Siagian