Doodhwala shuts down operations; FreshToHome takes over its consumer base

Microdelivery business (aka subscription commerce) isn’t an easy business as making money through selling milk is tough. We have witnessed the shutdowns of several startups as well as the consolidation of a few with large companies interested in the space.

The segment seems to have seen another casualty.

Bengaluru-based Doodhwala has stopped operations due to certain undisclosed constraints. According to an email sent to its subscribers, FreshToHome will continue to service Doodhwala’s customer base in Bengaluru. 

It’s not known what sort of arrangement has facilitated FreshToHome to takeover Doodhwala’s customer base. It could be an acquihire deal also. However, Ebrahim Akbari has denied saying anything about the shutdown and nature of the deal with FreshToHome. 

Founded in 2015 by Akbari and Aakash Agarwal, Doodhwala used to deliver milk, grocery, vegetables, eggs, bakery, meat and FMCG products in Bengaluru. This is the second major venture to go down in the past 18 months. Last year, Noida-based MrNeeds had wound up operations. 

FreshToHome, on the other hand, is an online platform for fresh meat and seafood, had recently started milk delivery service in Bengaluru. The startup is backed by the likes of Iron Pillar, CE Ventures and Joe Hirao.

BigBasket absorbed Pune-based RainCan and Bengaluru-based Morningcart for its micro-delivery service BBDaily. After optimism in micro delivery space for over three years, it seems to be drawing tad response from venture capitals.

According to Entrackr sources, Milkbasket and Dailyninja have been in the market to raise funds. The Gurugram-based firm is trying to raise fresh round from new investors while Dailyninja is in talks with existing backers Sequoia Capital and Matrix Partners to raise a follow-on round.

Despite the early euphoria in micro delivery startups, many experts believe that they aren’t scalable. According to them, apart from the top three metros (Bengaluru, Mumbai, and NCR), the use case of micro delivery platforms aren’t justified.

The segment has turned competitive because of competition from the entry of deep-pocketed players - Swiggy and BigBasket. Swiggy has a presence in subscription commerce through its portfolio company SuprDaily.

To maintain their growth and existence, Milkbasket and Dailyninja have to raise a large round soon. It would be exciting to see how their fundraising plans fare up.