Indonesia-headquartered online grocery platform HappyFresh has bagged $65 million in Series D funding round.
It was led by Naver Financial Corporation and Gafina B.V., followed by STIC, LB, and Mirae Asset Indonesia and Singapore.
Existing investors such as Mirae Asset-Naver Asia Growth Fund and Z Venture Capital have also participated. The round exceeded initial targets, due to significant demand from new and existing investors, HappyFresh said in a statement on Monday.
“We see a big shift in customers’ behavior; retention and frequency rates have significantly increased while the overall basket size has been consistently growing. We attribute this to a major shift in share of wallet from offline to online, which is here to stay,” HappyFresh Chief Executive Officer Guillem Segarra said.
“Continuing to focus our efforts on providing a convenient and safe service, we will be enhancing our existing operating model together with our partnerships we already have with supermarket retailers across the region,” he added, when asked about what the funds will be focused on.
The latest funding round came as countries HappyFresh operates in including Indonesia, Malaysia, and Thailand are still battling with a high number of COVID-19 cases. Tighter lockdown measures imposed to contain the virus have boosted online grocery shopping and delivery services.
The funding round also came after HappyFresh raised $20 million in Series C funding round led by Mirae Asset-Naver Asia Growth Fund in April 2019. Line Ventures, Singha Ventures and Grab Ventures also participated the funding round then, according to earlier media reports.
HappyFresh said the team has also put in place plans to improve service offerings such as more payment methods, better user experience and assortment, bringing its service to more families in each country across the region.
“The strong management team and unique service offering will enable HappyFresh and its partners to successfully navigate these unprecedented times, with best-in-class customer experience and safety, building loyalty and long-term market leadership positions.” Peter Na, Director of Southeast Asia Investments at Naver and board member of HappyFresh said.
Over the past 18 months, HappyFresh said it has been experiencing unprecedented growth as families have turned to HappyFresh to get their groceries delivered during the pandemic.
The company said it has also moved further towards achieving long-term profitability in a time when it’s proven challenging to sustain a business. In 2020, traffic has grown by factors of 10 to 20 times across the three countries it operates in, which has translated into growth in top-line as well as both new and repeat customers and improved economics.
Southeast Asia online economy has hit an inflexion point, powered by rapid adoption and fundamental shifts in consumer behaviour. With a corresponding retail market size of $350 billion, grocery retail segment in Southeast Asia presents a sizeable and growing market opportunity for HappyFresh, the company said.
E-grocery is rising rapidly across Asia in particular Southeast Asia; younger populations in urban regions with higher income and expenditure have driven early adoption, while in the past year, mass-market adoption has massively accelerated the overall penetration of digital platforms.