Interesting funding alert- A cloud kitchen startup announced a funding of USD 62 million
Interesting funding alert- A cloud kitchen startup announced a funding of USD 62 million
One of the terms we have been now hearing regularly is the cloud kitchen. Cloud kitchen is changing the image of the food industry.
Let us talk about the cloud kitchen and what changes it is bringing to our lives. Cloud kitchen is also called the ghost kitchen or the virtual kitchen. Explaining what a cloud kitchen is, it is a sort of a commercial kitchen that is engaged in providing the services and the facilities which are required to prepare menu items for delivery and takeout.
Cloud kitchens are different from brick and mortar kitchens, they give an opportunity to the businesses to create and deliver food products with very less overhead costs.
With the spread of COVID 19 and the lockdown imposed, the restaurant industry has suffered a huge setback. The restaurant industry had nearly seen a decline of around 53 percent in the fiscal year 2020-2021.
So because of this, the food delivery system has taken a hit. According to data, meal delivery has increased by 150% from the year 2019 to the year 2020. Predictions have been made that the food delivery market will be seeing a huge increase, from around USD 35 billion per year to almost USD 365 billion per year.
The cloud kitchen industry is a big change in the food-tech industry of the country. The startups working in the cloud kitchen industry have received more funding than the food delivery business in the year 2019. These cloud kitchens are located in low-rent areas and are solving the problems visitors face in coming to the restaurants and dining in.
Talking about whether the cloud kitchens are profitable or not, just imagine that the starting investment in the cloud kitchen is INR 10 lakhs. This amount could change and vary depending upon the requirements.
Now, if we take that the average order value per day is INR 300 and INR 750/800, a break-even point could be achieved by the cloud kitchen in the first year only.
Cloud kitchens may look very attractive, but they have their own set of disadvantages even. We agree that the initial costs and the setup costs are low but with that, the revenues of the cloud kitchens are also low.
The customers expect to pay less since there is no ambiance they are enjoying. This makes it very difficult for cloud kitchens to increase their prices.
Some of the famous cloud kitchens in our country, India is-
Biryani by the kilo, Cafe RESET, SLAY Coffee, Meat Stock Exchange, Firangi Bake, Sweet Truth, Pizza on my Plate, Karate Kitchen, Cross-Borders Kitchen, Oven Story Pizza, Kitchen Mantra, Sloppy Sticks, Outlet Buddy, Fat Punjabi, Faasos, MOJO Pizza, and many more.
Even big companies like Zomato and Swiggy have now marked their entry into the market of cloud industry. The number of cloud kitchens has almost tripled between FY 2019 and FY 21 on Swiggy and has almost doubled in Zomato from January 2020.
Let us now talk about the funding of a startup that is working in the cloud kitchen industry that has taken place recently.
Announcement of funding of a cloud kitchen startup
The cloud kitchen startup, Curefoods, has raised funds worth USD 62 million, as announced on January 12, 2022. This round of funding was led by Iron Pillar, Chiratae Ventures, Sixteenth Street Capital, and Accel Partners.
The other participants of this round of funding were Binny Bansal, who is the founder of Flipkart, Alteria Capital, BlackSoil Capital, and Trifecta Capital.
The USD 62 million of funding was divided into equity funding and debt financing. The USD 52 million of funding came through equity funding whereas the leftover USD 10 million of funding came through debt financing.
The debt financing portion of this round of funding was carried by Alteria Capital, BalckSoil Capital, and Trifecta Capital.
The startup plans to make use of the funds raised by using 30-40% of the total funds raised in making acquisitions of the brands of the cloud kitchens all over the country. The startup also has plans to expand its business geographically around the country. The startup is also planning to build a D2C platform for all its brands.
About cloud kitchen startup that has recently announced funding
The cloud kitchen startup, Curefoods, was founded by Ankit Nagori, who is also the CEO of the startup. Ankit Nagori was previously the senior executive at Flipkart. He also had founded a fitness startup, Curefit, with Mukesh Bansal, who is also the co-founder of Myntra.
The startup is engaged in building tomorrow’s food brands today. The purpose of the startup is to make honest food that customers love. By incubating food brands and operating state-of-the-art cloud kitchens, the startup wants to democratize access to good food in a sustainable manner.
The ways of the startup are explained below-
1. Deep tech- The tech stack of the startup brings everything from raw material sourcing to targeted customer acquisition into one pipeline. This makes business intelligence significantly better.
2. Fresh Food Factory- State of art, large commercial kitchens with the cooking and packaging tech to churn out 1 lakh meals every day.
3. Inside Engine- It has multi-brand exposure, its own commerce platform, deep tech, and a strong team that combines to create compelling customer insights that create step jumps for brands.
4. Incubation Engine- Backend operations, channel management capability, and scale exposure makes the startup the best incubation engine for any PMFed brand to scale from 1-10 and then on to 100.
The brands in the portfolio of the startup are Eatfit, Aligarh House, Yumlane, Great Indian Khichdi, Canteen Central, Nomad Pizza, CakeZone, Iceberg, Chaat Street, and Juno’s.
The investors of the startup are iron Pillar, Accel, Sixteenth Street Capital. Nordstar, and Chiratae ventures. The startup now has plans to increase the number of companies on its portfolio to 25 by the middle of this year.
The startup is doing great and is working for what somewhere looks like the future of the restaurant industry. We wish the startup nothing but good luck and a bright, shining, and successful future ahead.
Edited and proofread by Ashlyn
