Milk deliveries may not sound like an industry in need of disruption, but that’s exactly what one startup in India is working to do. Supr Daily — the company in question — graduated the Y Combinator accelerator program this year and now it has raised $1.5 million from a range of investors to expand its service.
The Supr Daily service is designed to bring formality and order to India’s chaotic system of morning milk deliveries, while it also combats quality issues around milk, as we wrote when we covered the company in February.
Government reports suggest that as much as 68 percent of milk is ‘tainted’ as delivery people will water their milk down in order to get more bags and income for their lot. The milk can include additives like detergent, caustic soda, glucose, white paint and refined oil to mask coloration, according to Times Internet. Supr Daily sources fresh milk directly and pays delivery staff higher wages to provide genuine milk, while it also includes tester kits for customers.
Milk is the main hook for Supr Daily service but customers can also buy every day essentials like bread, eggs, butter and coconut milk to save regular trips to the shops.
The service launched in 2015 and it is currently active in 15 neighborhoods in Mumbai. Company co-founder Puneet Kumar told TechCrunch that it is close to making its one millionth delivery. Supr Daily started out with limited reach very deliberately to test the viability of its service, and now Kumar and fellow co-founder Shreyas Nagdawane are eying expansions. Initially that will be to cover all of Mumbai, and then later into one of India’s other tier-one cities.
“We’re using [this new] capital to scale and build a city playbook to take this business to multiple cities in India,” Kumar said in an interview.
The investment comes from a range of backers including Soma Capital, Great Oaks Ventures and 122 West Ventures. Angel investors who participated include Y Combinator Partners Paul Buchheit and Jared Friedman, and Roger Egan, who sold his Singapore-based e-grocery firm Redmart to Alibaba-owned Lazada last year.
“We’ve chosen people with a lot of knowledge of the grocery market to help us navigate the space,” Kumar said.
Supr Daily isn’t lifting the lid on its financials yet, other than to say that the business grew four-fold in the first quarter of this year while it was at YC. But Kumar said its model is not a loss-making as is commonly the case for on-demand and delivery-based business.
“Each delivery is making money, the unit economics are healthy,” he explained. “Our burn rate is really low so this money gives us a lot of runway to scale.”
“Our last mile delivery cost is sub $0.05, that’s a 20/30x cost advantage [on other delivery services] that really puts us in a formidable position,” Kumar added.