Dumpling, an online platform that allows people to start their own grocery shopping and delivery business, announced today that it has raised $6.5 million in Series A funding. The round was led by Forerunner Ventures, with participation from Floodgate and Fuel Capital. This brings the total amount raised by the company to $10 million.
Unlike Instacart, which is a grocery delivery company that directs independent contractors, Dumpling is a platform for individuals to start their own grocery shopping and delivery business. These business owners, as Dumpling refers to them, set their own pricing and delivery areas, and develop their own clientele. Dumpling provides not only the technical and payment infrastructure for its shoppers, but also coaching on how to build and market their businesses.
I spoke with Dumpling Co-Founders and Co-CEOs Joel Shapiro and Nate D’Anna by phone this week. According to them, this approach means more empowerment and money for its business owners, and more choice for the end customer. Shapiro and D’Anna said that Dumpling shoppers earn $33 per delivery (and that’s a pre-pandemic number, which has since gone up given record setting grocery e-commerce).
Additionally, because Dumpling is not affiliated with any one grocery store, Dumpling shoppers are able to shop at multiple stores for a single order, so a person could get their favorite snack from Trader Joe’s and a six-pack of Coke from Safeway delivered at the same time from the same person.
The system isn’t perfectly efficient yet. Dumpling is not plugged directly into the inventories of store. So instead of tapping on items in an app, a customer may need to write out actual lists or send photos of the products they are looking for.
Dumpling makes its money by charging a 5 percent fee per order, which the business owner can pay or pass on to the customer, as well as a set monthly fee or $5 per transaction to the business owner to be on the platform.
Today’s funding announcement comes on the heels of grocery delivery giant Instacart raising $225 million last week. While Instacart has raised $2 billion so far, Dumpling’s more hands-off, DIY approach to its shoppers could keep it competitive because it pushes the marketing and business building on to its shopper network. Plus, at least so far, Dumpling hasn’t run into the same labor issues that Instacart seems to run afoul of.
Dumpling’s funding is also coming at a time when states are re-opening and people are starting to go back into grocery stores. How much people retain their online grocery shopping habits remains to be seen, but it appears that the peak for online grocery shopping may have passed (at least for now).
There are currently 2,000 Dumpling business owners operating in all 50 states. The company said that it will use its new funding to develop tools that allow its business owners to shop and build out their individual businesses more efficiently.