ASWEMAKE, a South Korea-based company that operates the digital transformation solution ‘Qmarket‘ for grocery markets, has secured 11 billion KRW (approx. $8.3 million USD) in Series B funding.

Existing investors Nanoori Equity Partners, Startup Research, JB Investment, and HGI were joined by new participants including A Ventures, We Ventures, Quantum Ventures Korea, Kiwoom Investment Management, Behigh Investment, and The Next Lab.

ASWEMAKE connects local grocery stores with nearby residents through its online same-day grocery delivery service, Qmarket. The company aims to become Korea’s leading O2O (online-to-offline) digital solution for grocery markets. Qmarket connects mid-sized offline stores with consumers within a 3km radius, offering same-day delivery within 3 hours by utilizing urban grocery markets as delivery hubs.

As of mid-2024, Qmarket has partnered with 501 grocery stores, generating 111.4 billion KRW (approx. $84.5 million USD) in transactions during the first half of the year, with cumulative totals exceeding 250 billion KRW (approx. $189.7 million USD). First-half sales reached 4.7 billion KRW (approx. $3.6 million USD), a 130% increase over the previous year’s total sales. Operating profits during this period hit 650 million KRW (approx. $492,800 USD), a remarkable 18-fold increase compared to the previous year, marking a significant turnaround to profitability.

A Ventures Vice President Kim Tae-gyu, who led the Series B round, commented, “ASWEMAKE has focused on a high-growth market that others often overlook. Their team has penetrated the market with impressive speed, setting up logistics, workforce, and infrastructure from the outset to create entry barriers. Their cleverly designed business model also gives them scalability and a clear competitive edge.”

Qmarket also offers ‘QMom,’ a workforce supply service that allows partner grocery stores to reduce labor costs by over 40% compared to non-partners. Additionally, their ‘Hat Delivery’ service, based on a digital transportation management system, enables stores to cut vehicle maintenance and fuel costs by 100%.

The company has further strengthened its position with ‘Qmarket Ads,’ a digital marketing solution that can reduce costs by up to 20 times compared to traditional advertising methods. This has helped Qmarket evolve into a comprehensive one-stop solution for digital transformation. ASWEMAKE expects to hit 15 billion KRW (approx. $11.4 million USD) in sales by the end of 2024, up from 300 million KRW (approx. $227,300 USD) in 2020, 2 billion KRW (approx. $1.5 million USD) in 2021, 7 billion KRW (approx. $5.3 million USD) in 2022, and 35 billion KRW (approx. $26.5 million USD) in 2023.

We Ventures Director Park Hyuk-jin, another new investor, expressed confidence in Qmarket’s potential. “Qmarket aims to digitalize large grocery markets by offering a one-stop service for online ordering, packaging, and delivery, utilizing existing infrastructure. They are also addressing local employment issues through partnerships with regional welfare centers, while achieving rapid growth in both revenue and operating profit.”

ASWEMAKE plans to use the Series B funding to expand its partnerships and improve operational efficiency, with a goal of partnering with 2,000 out of the estimated 7,200 grocery stores in Korea by next year. Unlike its competitors, Qmarket offers a solid and practical solution that helps grocery stores with digital transformation, aiming to create a world where consumers can enjoy food and drinks at the lowest cost, thanks to these partnerships.

In addition to strengthening its domestic market, ASWEMAKE is looking to expand internationally, targeting Japan as its first overseas market. Japan’s grocery market is three times larger than Korea’s, with its F&B sector valued at around 500 trillion KRW (approx. $378.9 billion USD). In May, ASWEMAKE participated in the ‘Climbers Startup JAPAN EXPO 2024,’ hosted by Japanese SaaS company SanSan, where they engaged with over 100 logistics and distribution companies to explore local partnerships and market opportunities.

ASWEMAKE CEO Son Soo-young expressed deep gratitude to both existing and new investors for their confidence in the company’s potential. “The key to digital transformation in the grocery sector is successfully integrating online and offline product management, securing sales channels to boost revenue, and providing convenient services like delivery that encourage repeat business. Our goal is to become the best at these three things not only in Korea but across Asia, working closely with our dedicated team to achieve this vision,” he said.