Food sector in India has grabbed the attention of investors. We’ve been hearing about at least one such start-up on an average every day. With an addressable market of $50 billion estimated to grow at the rate of 16-20% yearly, the opportunities are endless. Bengaluru-based mobile-only start-up Dazo (previously called Tapcibo) is riding high on this investor interest as it announced a new round of funding from some of the well-known names from the industry. Investors participating in the funding round include leading entrepreneurs like Sumit Jain (co-founder and CEO, CommonFloor), Aprameya Radhakrishna (co-founder, TaxiForSure), Alok Goel (former CEO, FreeCharge). The round also saw participation from Rajan Anandan (MD, Google India), Amit Agrawal (Country Manager, Amazon India), Vinay Goel (Director Product Management, Google Maps & Local), Gaurav Munjal (Co-founder and CEO, Flatchat) and leading hospitality entrepreneurs such as Ashish Dev Kapur (co-founder, Yo! China).
What Is Dazo?
Dazo is an Android app that can be used to order food on-demand. But unlike other players, Dazo is not just a delivery service. The menu is curated and users are given an option to choose from 8-10 items. The user can order their choice of meal with just three taps on the app. At the other end, delivery executives carry smartphones powered by a system to get food from nearby restaurants delivered to you.
Dazo was founded in October 2014 by Shashaank Shekhar Singhal (ex-redBus director) and Monica Rastogi (founder of Explore-in-Android). “We want Dazo to be a household name,” Shashaank said about the re-branding. The founders figured that Dazo was a much easier name to pronounce and relate to. The startup is serving 150+ orders on a daily basis. The startup is seeing high number of repeat orders with the average customer ordering 2-3 times a week. The app has been downloaded over 4000 times. According to Shashaank, a new food partner gets as many as 20 orders on their first day as a Dazo partner. The team hasn’t spent a single rupee on marketing till date and the current team size stands at 20.
What’s More In Store?
The past six months have seen numerous funding news in the foodtech space. Mumbai-based food ordering app TinyOwl had raised Rs. 100 crore in its second round of funding from Matrix Partners, Sequoia Capital and Nexus Venture Partners. Also, Bengaluru-based food delivery startup Swiggy recently secured $2 million funding from Accel Partners and SAIF Partners. Even stalwarts like Zomato and Foodpanda have entered the food delivery space.
Food is the highest frequency e-commerce segment and high ordering behavior leads to brand creation and loyalty, thus leading to strong lifetime value of a customer. This is the leading reason why taxi moolahs like Ola are trying to make a strong foothold in the segment with Ola Cafe.