Dive Brief:

• Dumpling, a tech startup that helps individuals launch their own personal grocery shopping services, has raised $6.5 million in Series A funding, according to a company press release. The company has raised $10 million in total since it began.
• The round was led by Forerunner Ventures, which has also invested in companies like Warby Parker and Dollar Shave Club. In a statement, Forerunner said Dumpling flips the gig economy model on its head, helping workers start their own digitally-native service business.
• Dumpling will use the investment to add new features and tools for more than 2,000 business owners across 50 states, many of whom have seen a surge in business during the COVID-19 pandemic. According to the press release, Dumpling has seen its order volume grow by 20 times since the outbreak.

Dive Insight:

Dumpling has set out to reinvent what it calls the “severely broken gig economy” with a business model that focuses less on automation and more on building connections, the company said, which fuels repeat orders. 

The startup differs from services like Shipt and Instacart by giving people the tools they need to run their own delivery services, rather than running the service centrally. Business owners using Dumpling keep 100% of their tips, set their own schedules and, according to the company, earn about three times more than Instacart shoppers, on average. They also recruit their own customers and manage their own client relationships. 

In turn, Dumpling charges business owners 5% per order and a set monthly fee or $5 per transaction to access the platform, according to The Spoon. Its Pro version is $39 a month, with no per order charge.

Using Dumpling, shoppers can go to multiple stores for a single order if a customer wants items from different places. The technology is still being refined to make the process smoother, The Spoon reported.

COVID-19 has been a boon for Dumpling’s labor pool as unemployed workers look for jobs in a booming industry like grocery or gig workers unhappy with the lack of protection and hazard pay from other delivery companies, look for alternatives.

In a recent interview with Grocery Dive, the company said it doubled the number of business owners on the platform over two months and sees interest from 50 to 100 new entrepreneurs a day. Many of the people turning to Dumpling previously worked for companies like Shipt and Instacart.

Investor interest is peaking in major players and startups alike amid growing demand in grocery delivery. Instacart closed a $225 million round of funding last week, while grocery and meal planning startup Jupiter just raised $2.8 million in seed funding.