Curefoods, a startup specializing in cloud kitchens, has raised INR 300 crore in a funding round. With this infusion of funds, Curefoods plans to expand its brands into offline formats and increase its presence in northern and western Tier I and II cities in India.
The investment was led by Three State Ventures, a venture capital firm co-founded by Binny Bansal, one of the founders of Flipkart. Other investors in the round include IronPillar, Chiratae Ventures, ASK Finance, and Winter Capital. The funding was a combination of primary and secondary equity and debt, with Three State Ventures contributing INR 240 crore.
Founded in 2020 by Ankit Nagori, a former Flipkart executive, Curefoods runs a house of brands, including EatFit, CakeZone, Nomad Pizza, and Frozen Bottle. The cloud kitchen operator has over 150 kitchens that cater to over 10 cuisines across 15 cities in India. The company logged a revenue of Rs 88.4 crore in FY22, its first year of operations, with total expenses amounting to Rs 165 crore. Its business grew 300% year-on-year in FY23, according to the company.
“This funding will allow us to reach new customers and markets while also targeting our offline model expansion,” said Ankit Nagori, Founder of Curefoods. The company has set a target of Rs 1,000 crore annualized revenue run rate (ARR) by the end of 2023, it said. During the period, it also plans to open at 50 more locations with an aim of managing 2 million orders a month.
“We are excited about the future of consumer brands and look forward to innovating and leading brands in this space for India, while delivering authentic and nutritious food to many Indians, according to the Indian taste palette,” Nagori said.
The gourmet pizza brand Nomad Pizza and the biryani brand Sharief Bhai are the fastest-growing brands, growing at over 50 percent quarter-on-quarter, Curefoods said. In December last year, Curefoods crossed 1.1 million orders per month, resulting in an annual recurring revenue of Rs 550 crore, the company said in a statement.
Curefoods said that in FY23, it saw year-on-year growth of over 300 percent. In FY22, it reported operating revenue of Rs 215.7 crore. A 300 percent increase suggests that revenue topped Rs 800 crore in FY23. The company, however, reported a loss of Rs 681 crore in FY22. It continues to focus on profitability and achieving growth and presence around India in the coming years, it said.
The food tech industry is witnessing a significant shift in consumer behavior, with more customers ordering online, leading to an increase in demand for cloud kitchens. Cloud kitchens allow restaurants to reduce their operating costs by eliminating the need for a physical storefront, which has led to a surge in the number of cloud kitchens across the country.
Curefoods targets to increase its market share in the $71.4 Billion Cloud Kitchen Market
Curefoods is one of the many cloud kitchen startups that have received funding in recent times. The COVID-19 pandemic has accelerated the growth of cloud kitchens as more customers prefer to order food online. The global cloud kitchen market is expected to reach $71.4 billion by 2027, growing at a CAGR of 12.0% from 2020 to 2027, according to a report by Allied Market Research.
Cloud kitchens have become a popular business model, especially during the pandemic, as they allow restaurants to operate with lower overhead costs. In India, cloud kitchens are expected to be a $2 billion market by 2024, according to a report by RedSeer.
As Curefoods continues to expand its operations and explore new opportunities, it faces stiff competition from other players in the industry. Rebel Foods, for instance, is one of its main competitors, with a portfolio of popular food brands like Faasos, Behrouz Biryani, and Ovenstory Pizza. Other competitors in the space include Biryani by Kilo, InnerChef, and Freshmenu.
Despite the competition, Curefoods remains confident in its ability to succeed and grow. With its latest funding round, the company has the resources it needs to continue to innovate and expand, both in terms of its online presence and its brick-and-mortar locations. As the Indian food delivery market continues to grow, Curefoods is well-positioned to capture a significant share of this lucrative market and become a household name across the country.