[dropcap type=”default”]I[/dropcap]t is exciting that there are now few funding news doing the rounds in Nepal as well. As we highlighted before that the Nepali startup ecosystem is still at a nascent stage and entrepreneurs often have to rely on their own resources to start their ventures.
The first and one of the popular food delivery platforms of Nepal, Foodmandu has raised an undisclosed amount as a part of their Series B funding. The investment has been made by Team Ventures at an undisclosed valuation. This is unlike most parts of the world where these figures are usually disclosed or is it just that the volume of transaction or the valuation is too low to discuss. This also shows a clear lack of confidence from the investors and the founder of Foodmandu on the figures they have arrived at or is it just a strategy to avoid scrutiny from the tax authorities?
Foodmandu was founded by Manohar Adhikari back in 2010 and ran it as a bootstrapped venture until 2016, when it raised its first round of funding from True North Associates. First round of funding after 6 years of operation clearly shows the risk appetite of the so-called PE/VCs in Nepal as they are willing to put their money only on tried, tested and successful ideas. Similar was the case when the popular fintech service company F1 Soft International received investment from Kantipur Media Group at a valuation of around USD 15 million nearly after a decade of operation.
Seed funding and angel investment is still unheard of other than as a part of incubation or accelerator programs. Internationally, where there are dedicated angel and seed investors, Nepalese startup ecosystem still doesn’t have such ecosystem partners.
Foodmandu currently has tie-ups with over 500 restaurants and the investment raised is said to be for the expansion of Foodmandu’s business to in other geographies. Besides delivering food from its partner restaurants, Foodmandu has also recently ventured into the delivery of groceries, beverages, cakes etc. The startup boasts of around 200 delivery partners and the business is said to have grown over 10 times.
Mr. Nidhan Shrestha, investment manager, represented TNA while Mr. Tenzin Sonam Gonsar represented Team Ventures.
Commenting on the transaction, Mr. Suman Joshi, founder of TNA shared:
Here’s proof that PE investment works in Nepal as well: not only does it provide good return prospects but also helps companies scale faster; more jobs are created and governance standards improve. With a little tail-wind, we can take the PEVC scene in Nepal to the next level.
The food delivery market seems to be suddenly crowded by a lot of new names over the last year or so. Bhoj, Foodmario, 911 Food Express, Foodmood, Bhok Lagyo, Fitbox, Khanpin etc. are making inroads into the food delivery market. This market soon looks to move towards consolidation like the Indian market has seen where the unicorns Zomato and Swiggy enjoy duopoly in a USD 5 Billion market which is expected to grow threefold in next 5 years.