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Velocity earmarks Rs 200 Cr for restaurant and cloud kitchen brands

EntrackrEntrackr ยท 6m ago
Velocity earmarks Rs 200 Cr for restaurant and cloud kitchen brands
Medial

Cash-flow-based financing platform Velocity has earmarked Rs 200 crore in 2025 to support and accelerate growth in the restaurant and cloud kitchen ecosystem across India. The fund is designed to address the unique challenges faced by F&B brands and help them grow. It eliminates the hassles often encountered by F&B brands struggling to secure financing from traditional sources like banks and NBFCs. By offering cash-flow-based financing, Velocity enables restaurants and cloud kitchens to manage capital expenditure, working capital, open new outlets, purchase equipment, and launch sub-brands without impacting operational profits. As per a report by Swiggy and Bain & Company, India's food delivery and dining-out market is projected to grow from approximately $66 billion to $108 billion by 2030. According to Velocity, its fund aligns with this growth, focusing on empowering new-age restaurants and cloud kitchen brands, particularly those operating via food aggregator platforms like Zomato and Swiggy. The fund aims to support innovators in the space by offering fast, scalable, and flexible financing solutions, enabling F&B brands to seize emerging market opportunities, scale operations, and meet increasing consumer demand. Since 2020, Velocity has funded several F&B brands such as IDC Kitchen, Smoor, Daily Sushi, Brahma Brew Works, Milano Ice Cream, Imperio, Amore Gelato, Jamie's Pizza, and Baba's Chicken. These businesses utilized the funds to expand operations, strengthen supply chains, and enhance marketing efforts. India's F&B industry is undergoing a rapid transformation driven by quick commerce, cloud kitchens, and ultra-fast delivery models. Platforms like Zepto, Swiggy Instamart, and Blinkit have introduced 10-minute delivery services such as Zepto Cafe, Bolt, and Bistro. Bigbasket and Magicpin are also preparing to enter this space, while emerging players like Swish and Zing are gaining traction. Co-founded in 2020 by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity is a cash-flow-based financing platform for new-age businesses. It leverages digital-first businesses' data and online cash flows to offer innovative financing solutions. Velocity has disbursed over Rs 1,000 crore to more than 1,200 digital-first businesses, enabling them to overcome working capital challenges. The Bengaluru-based fintech has raised $30 million in equity funding led by Peter Thiel's Valar Ventures. Its portfolio includes D2C brands like Soulflower, Chumbak, and Off Duty.

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Velocity launches Rs 400 Cr festive season fund for D2C brands

EntrackrEntrackr ยท 10m ago
Velocity launches Rs 400 Cr festive season fund for D2C brands
Medial

Cash flow-based financing platform Velocity has launched a fund of Rs 400 crore ($48 million) to support D2C and e-commerce brands in the upcoming festive season sales. The Bengaluru-based firm had launched a Rs 250 crore fund for the festive season last year. This financing will support brands and sellers on major e-commerce platforms (such as Amazon, Flipkart, Myntra and Shopify) and new-age quick commerce platforms (like Blinkit, Instamart, Zepto) in enhancing their product assortment, accelerating delivery timelines, and capitalize on emerging trends such as premiumization. The fund will allow brands to invest in inventory, marketing, and operational expenses without diluting their equity, Velocity said in a press release. According to market research, e-commerce sales are projected to see 20% growth in the 2024 festive season as compared to 13% growth in e-commerce GMV (gross merchandise value) last year. Velocity is indulged with the largest ecommerce marketplaces and several ecosystem enablers to support the upcoming festive demand across sectors such as beauty and personal care, apparel/ fashion, consumer electronics, food and beverages, home, garden and kitchen, jewelry and accessories, healthcare and other e-commerce categories. Co-founded in 2020 by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity focuses on democratizing access to working capital for the various sectors. The platform leverages digital-first businessesโ€™ data and online cash flows to offer innovative financing solutions. It provides non-dilutive debt financing to e-commerce founders. Velocity says that it has leveraged its partnerships with Indiaโ€™s leading NBFCs and regulated entities to empower over 1,500 e-commerce brands like Koskii, Power Gummies, Hammer, Bella Vita Organic, Bewakoof, Bunaai, Leaf, Crossbeats, Blaupunkt, Zlade, and Soulflower among others. It also says that it has disbursed over Rs900 crores, enabling over 1,500 businesses, especially D2C and e-commerce companies. Velocity has raised $30 million in equity funding led by Valar Ventures and competes with the other players in this space like GetVantage, Klub, Clearco, CRED Mint, Wayflyer, and KredX.

Binny Bansalโ€™s Three State Ventures invests $25 Mn in Curefoods

EntrackrEntrackr ยท 1y ago
Binny Bansalโ€™s Three State Ventures invests $25 Mn in Curefoods
Medial

Cloud kitchen startup Curefoods has raised an additional capital of $25 million in its Series D round from Three State Ventures, a fund launched by Flipkart co-founder Binny Bansal. The company raised $36 million in the first tranche of Series D and is now valued at $375 million, according to Curefoods founder and CEO Ankit Nagori. As per data intelligence platform TheKredible, it has raised more than $190 million to date. Bansal made the investment by buying out Cultfitโ€™s remaining stake in the cloud-kitchen platform and from some angel investors, according to an ET report. Four-year-old Curefoods operates brands like EatFit, Yumlane, Aligarh House Biryani, Masalabox and CakeZone. It has over 100 kitchens in over 200 locations across 15 cities serviced by a backend operation of over 7 food factories, and 150 multi-brand cloud kitchens. Also Read: Decoding the financial health of leading cloud kitchen startups Besides fundraising, the company also acquired two brands โ€“ YumLane Pizza and Millet Express in 2023. Curefoods competes with Rebel Foods and Box8, FreshMenu, and a host of independent brands such as Biryani Blues and Biryani by Kilo. Among the cloud kitchen brands, Curefoods is the second largest brand in terms of revenue after Rebel Foods. While Rebel Foodsโ€™ revenue from operations grew 39.2% to Rs 1,195 crore in FY23, Curefoods reported Rs 384 crore in revenue followed by EatClub with revenues exceeding Rs 300 crore in the same period. Biryani By Kilo also claims a revenue of around Rs 300 crore in the last fiscal year.

Curefoods reports Rs 635 Cr income in FY24, halves losses

EntrackrEntrackr ยท 6m ago
Curefoods reports Rs 635 Cr income in FY24, halves losses
Medial

Indian cloud kitchen major Curefoods reported a 53% year-on-year growth in operating scale for the fiscal year ending March 2024. At the same time, the Bengaluru-based firm halved its losses by significantly reducing advertising costs. Curefoodsโ€™ revenue from operations soared by 53.17% to Rs 585 crore in FY24 from Rs 382 crore in FY23, shows its consolidated financial statement sourced from the Registrar of Companies (RoC). Curefoods is a cloud-kitchen platform which operates brands like EatFit, Yumlane, Aligarh House Biryani, Masalabox and CakeZone. At present, it has over 100 kitchens across 12 cities in India. The sale of these foods was the sole source of revenue for the company in the last fiscal year. The company also made additional Rs 50 crore from interest income pushing Curefoodsโ€™ total income to Rs 635 crore in FY24. On the expense side, the cost of materials remained the largest component, increasing by 33.72% to Rs 229.6 crore. Advertising expenses were reduced by 50.8% to Rs 52.8 crore, while employee benefit expenses rose by 43.18% to Rs 148.2 crore. Guarantee commission expenses spiked 56% to Rs 109.2 crore, while depreciation costs also rose by 45.2% to Rs 62 crore. In the end, Curefoodsโ€™ total expenses nearly doubled to Rs 806.8 crore in FY24. Due to sharp decline in advertising costs, the company managed to reduce its net loss by 50% to Rs 172.6 crore in FY24. Its ROCE and EBITDA margin stood at -23.31% and -12.88%, respectively. On a unit basis, Curefoods spent Rs 1.38 to earn a rupee in FY24. As of March 2024, the firm reported Rs 326 crore of current assets in FY24 including Rs 37.5 crore of cash and bank balance. As per startup intelligence platform TheKredible, Curefoods has raised more than $200 million to date from the likes of Binny Bansalโ€™s Three State Ventures, Accel, Chirate and Alteria. Since its inception the Ankit Nagori-led company has also acquired more than a dozen cloud kitchen brands such as Yumlane, Smoodies, Cakezone, Maverix, Nomad Pizza, among others. Curefoods is the second-largest player in the cloud kitchen segment after Rebel Foods. Rebel Foods, which recently raised $210 million in one of the largest funding rounds of 2024, reported an operating revenue of Rs 1,420 crore in FY24. Other notable players in the space include EatClub and Biryani By Kilo. The sharp cutback on advertising costs tells its own story. Poorly crafted brand building, and now, what seems to be a commodification of the delivery business. Driven more by platforms than the restaurant or kitchen owners themselves. We believe in the long term, the high platform dependence does not augur well for anyone, as far as margins go. While pockets of the market will grow, overall market size is not growing at the same rate, and platforms will keep up their margin creep. Will Curefoods become profitable before the margins become worse? No one can say with certainty, but we believe 2025 will see yet more efforts to shake the grip of Swiggy and Zomato on the food delivery business, however doomed that might seem for now. Dominoโ€™s remains the only success story thanks to their legacy delivery business, and the difference shows in more ways than one.

Exclusive: Curefoods receives nearly $10 Mn from Binny and Jitender Kumar Bansal

EntrackrEntrackr ยท 9m ago
Exclusive: Curefoods receives nearly $10 Mn from Binny and Jitender Kumar Bansal
Medial

Cloud kitchen startup Curefoods has raised another Rs 80 crore or $9.6 million but this time in debt from Binny Bansal and Jitender Kumar Bansal. This is the second fundraise for the Bengaluru-based company in the past six months. As per the ROC filings company obtained a loan of Rs 80 crore from Binny Bansal and Jitender Kumar Bansal by way of advancing an unsecured member deposit as per the terms set out in the loan agreement between the company and the two investors. In March, Curefoods scooped up $25 million as a part of Series D funding from Three State Ventures, a fund launched by the Flipkart co-founder. As per startup intelligence platform TheKredible, it has raised more than $200 million to date. According to a Moneycontrol report, Curefoods is in talks to raise $40 million as part of its Series D round in a mix of primary and secondary transactions. The companyโ€™s valuation might reach the $500 million mark. Launched in 2020, Curefoods operates brands like EatFit, Yumlane, Aligarh House Biryani, Masalabox, and CakeZone. It has over 100 kitchens in over 200 locations across 15 cities serviced by a backend operation of over 7 food factories, and 150 multi-brand cloud kitchens. Besides back-to-back fundraising, the company also acquired two brands โ€“ YumLane Pizza and Millet Express in 2023. In December, it invested Rs 10 crore ($1.2 million) in Hogr, a social platform that enables restaurant and food discovery. Curefoods has emerged as the second largest player in the cloud kitchen after Reebel Foods. Curefoods reported Rs 384 crore in revenue in FY23 while its FY24 numbers are yet to come. Rebel Foodsโ€™s operating revenue reached Rs 1,420 crore in FY24. EatClub and Biryani By Kilo are the next notable companies in the space with revenue of more than Rs 300 crore in FY23.

Decoding the financial health of leading cloud kitchen startups

EntrackrEntrackr ยท 1y ago
Decoding the financial health of leading cloud kitchen startups
Medial

The restaurant industry is witnessing a transformation with the rise of delivery-only models known as โ€˜cloud kitchensโ€™, โ€˜virtual kitchensโ€™, or โ€˜ghost kitchensโ€™. These innovative concepts are reshaping how food is prepared, delivered, and consumed, challenging traditional restaurant models. According to a Redseer report, the estimated size of the cloud kitchen market would touch $3 billion by 2024, from $400 million in 2019. Moreover, top startups operating in the segment mopped up around $600 million in funding in the past three years and close to $1 billion since their inception, according to the startup intelligence platform TheKredible. Among Indiaโ€™s top cloud kitchen startups, Rebel Foods stands out as the poster boy with a topline of around Rs 1,200 crore in FY23. The list further includes Curefoods, EatClub, Biryani By Kilo, FreshMenu, Biryani Blues, Kitchens@, Bigspoon, Dil Foods, and HOI Foods. [Top funded cloud kitchen startups] Rebel Foods, which operates brands like Faasos (now EatSure), Oven Story, Lunch Box, The Good Bowl, Behrouz, Sweet Truth, and Firangi Bake, also emerged as the sole unicorn from the cloud kitchen space. The Peak XV Partners-backed company alone raised over $535 million to date whereas Curefoods scooped up around $170 million from the likes of Binny Bansalโ€™s Three State Ventures, IronPillar, Chiratae, and Accel. In December 2023, Kitchens@ raised $65 million from London-based private equity firm Finnest. Itโ€™s worth highlighting that the firm also acquired Swiggyโ€™s cloud kitchenโ€™s business โ€˜Access Kitchensโ€™ in a share swap deal in March last year. To recall, Swiggy entered the cloud kitchen business back in 2017. EatClub raised around $75 million across rounds including a $40 million round led by Tiger Global in December 2021. In 2022, it was also in the news for a secondary round worth $30 million. The firm operates several popular cloud kitchen brands such as Box8 and Mojo Pizza. Biryani By Kilo recently raised $9 million in an ongoing round, pushing the companyโ€™s total fundraise to $55 million to date. [Top revenue-generating cloud kitchen startups in India] Rebel Foodsโ€™ revenue from operations grew 39.2% to Rs 1,195 crore in FY23 from Rs 858.6 crore in FY22. Curefoods and EatClub follow closely, with revenues exceeding Rs 300 crore each. Biryani By Kilo also claims a revenue of around Rs 300 crore in FY23. However, beyond these frontrunners, no other brands have crossed the Rs 100 crore revenue mark as of March 2023. FreshMenu, Biryani Blues, and Kitchens@ recorded 7.5%, 53.7%, and 64.8% growth in revenue to Rs 70.21 crore, Rs 68.54 crore, and Rs 61.6 crore, respectively during FY23. While Dil Foods and HOI Foods posted Rs 7.08 crore and Rs 2.85 crore operating revenue during the year. [Spending by the cloud kitchen brands in FY23] Rebel Foods spent 31.6% of its total expenditure on the cost of materials amounting to Rs 577.54 crore while 22.2% or Rs 405.46 crore on the employee benefit cost. The overall cost of the company surged 27.9% to Rs 1,827 crore during FY23 from Rs 1429 crore in FY22. Curefoods, EatClub, FreshMenu, and Biryani Blues also spent the most on the cost of materials accounting for Rs 171.7 crore, Rs 126.17 crore, Rs 27.48 crore, and Rs 25.88 crore respectively. Whereas, employee benefit costs of these brands stood at Rs 103.5 crore, Rs 99.5 crore, Rs 17.31 crore, and Rs 14.2 crore. Kitchens@, Dil Foods, and HOI Foods spent the most on employee benefits followed by the cost of materials. In line with revenue, Rebel Foods is also on top in terms of losses. Though, the rise in losses is lower than revenue growth. The companyโ€™s losses went up nearly 23% to Rs 656.5 crore during FY23. Curefoodsโ€™ bottom line jumped 4.7X to Rs 342.7 crore while EatClubโ€™s losses rose 53.8% to Rs 69 crore during the period. Kitchens@ (Rs 27.3 crore), Biryani Blues (Rs 15.42 crore), FreshMenu (Rs 10.15 crore), HOI Foods (Rs 1.23 crore), and Dil Foods (Rs 0.9 crore) are next in line in terms of losses. [A look at unit economics of top cloud kitchen brands] On a unit level, Rebel Foods, Curefoods, and EatClub spent Rs 1.53, 1.97, and 1.25 to earn a rupee of operating revenue in FY23. Despite their impressive revenue growth, profitability remains a challenge for many cloud kitchen startups. [Conclusion] When we compare the numbers of these players with the large listed players, we see a clear difference in critical cost heads like cost of material, employee costs. Those are areas that will need a continuous improvement in metrics, for these firms to make a serious push for profitability. While some like Freshmenu are in a clear battle to survive until the market turns into a less hostile environment, almost none of these firms can afford to burn through funds as they did in the pre-pandemic years. Even as customers seem to be reconciling to the sharp increase in sticker prices on the menu, pressure on margins from delivery, fast turning into duopoly, will ensure there is little respite in the immediate future. It will take some significant structural changes in the market, in terms of opportunity as well as growth drivers, for these firms to truly sizzle.

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