Hyperlocal startup Doodhwala suspends operations, migrates customers to FreshToHome

Bengaluru-based Banger Tech, which operates subscription-based milk and daily essentials delivery startup Doodhwala, has suspended its services. The startup has reached an agreement with fresh fish and meat etailer FreshToHome to transfer its consumer base to the latter’s newly launched daily essentials’ supply service, dubbed FTH Daily.

“It's been a great experience delivering your daily supplies to your doorstep, but we regret to inform you that we will be discontinuing our services due to unforeseen circumstances. However, you've nothing to worry about. We will make your daily essentials still reach your doorstep like clockwork, thanks to FTH Daily,” Doodhwala informed its subscribers via email. The same message is displayed on its website.

Ebrahim Akbari, founder and CEO of Doodhwala,  said, "I have no comments to offer as of now," in response to queries from TechCircle.

According to the agreement between the two firms, FreshToHome will be taking over the wallet liability of Doodhwala’s consumer base, Shan Kadavil, founder and CEO of FreshToHome, told TechCircle.

Founded in 2015 by Aakash Agarwal and Akbari, Doodhwala was a mobile-first subscription platform for milk and daily essentials.

In an interaction with TechCircle in November 2018, Akbari said the startup was closing in on a Series A funding round of about $12 million. The startup approached both new and existing investors, including impact investment firm Omnivore, which first invested in Doodhwala earlier last year.

However, the firm’s decision to shut down operations signals that the negotiations may not have gone as well as expected.

In February this year, the company raised $2.2 million (Rs 14.27 crore) from Omnivore. The sum was raised as an extension of the startup’s pre-Series A funding round, which it secured in August last year.

At that time, it was reported that Tom Varkey, a partner at US-based hedge fund Stonehill Capital, had invested in the startup.

Apart from more than 70 varieties of organic, raw and commercial milk, the four-year-old startup delivered over a lakh of products such as eggs, baked goods, meat, fruits and vegetables, groceries and staples, health drinks, personal care, and hygiene products among others.

Towards the end of last year, the company had claimed that it handled over four lakh deliveries in a month.

Doodhwala operated across Bengaluru, Hyderabad and Pune and claimed to be operationally profitable across verticals.

FreshToHome, also based in Bengaluru, launched FTH Daily about two months back, predominantly to offer its vegetarian users a separate service offering. Currently operational in Pune, Hyderabad and Bangalore, FTH Daily delivers milk and other dairy products besides fresh fruits and vegetables, and personal care products between 5.00 AM and 7.00 AM at maximum retail price (MRP).

“FTH Daily was launched to make sure that the vegetarian and non-vegetarian habits are served separately. The vertical function with a separate supply chain which will be managed completely separately from the non-vegetarian factories. Besides, morning deliveries category is a good source for reducing last mile delivery cost,” Kadavil said. FTH Daily has already achieved about 2000 orders daily, he added.

In August this year, FreshToHome raised $20 million in its Series B funding round led by venture capital firm Iron Pillar with the participation of Joe Hirao, founder of Japanese multi-business firm ZIGExN. A few of its existing investors including UAE-based Crescent Enterprises Ventures, Al Nassar Holdings and Massar International participated in the round. The fresh round will see FreshToHome spread operations to more cities in India and the UAE besides expanding its product portfolio. 

FreshToHome plans to expand the daily supply services to all of its existing markets including Kerala, Chennai and Delhi.