The fundraising was backed by a host of investors, including e-commerce firm 11st and retail conglomerate CJ Group. 11st acquired a 7.2% stake in the startup for about $22.7 million in convertible redeemable preference shares.
LB Investment, one of South Korea’s top venture investors, and STIC Ventures, a VC firm that focuses on small and mid-sized companies with core technologies and new business models, have also participated in the funding round, along with Korea Investment Partners, YG Investment, and Shinhan Venture Investment.
Barogo said it will use the fresh funding to establish storage facilities to deliver products ordered online across Seoul and its surrounding cities. The startup also announced plans to hire 100 more staff, including developers and those in nontechnical sectors, to boost its delivery services.
Barogo delivers food from restaurants and has roughly 1,000 transportation hubs nationwide with 54,000 registered delivery drivers. The total cost of products delivered by Barogo last year came to ₩2.92 trillion, up 166% on year.
Based in Gangnam-gu, Barogo is an on-demand same-day shipping service for Korean businesses, delivering a wide range of products, including clothes, documents, and food & beverages.
The startup earlier said that it aims to expand its partnership with firms within and outside of Korea, with plans to improve delivery services.
Barogo’s successful Series C funding comes as South Korea’s food delivery market expanded by 79% from the previous year to ₩17.4 trillion in 2020, according to data from Statistics Korea.
The growth was attributed to consumers frequenting ordering food online under stay-at-home norm during the global coronavirus crisis. The data further showed that online food orders have grown more than six-fold in size from ₩2.7 trillion in 2017.
In Southeast Asia, food delivery has grown significantly in the last decade, growing 183% from 2019 to 2020 and is estimated to reach $11.9 billion by the end of 2020, according to a report published by Momentum Works.