You are on page 1of 4

Food portals flavour of the season for

venture capital investors
By Madhav Chanchani,
economictimes.indiatimes.com
(http://getpocket.com/redirect?
url=http%3A%2F%2Feconomictimes.indiatimes.com%2Fnews%2Femergingbusinesses%2Fstartups%2Ffood-portals-flavour-ofthe-season-for-venture-capitalinvestors%2Farticleshow%2F45829833.cms)
View Original (http://getpocket.com/redirect?
fooddelivery (/a/queue/grid/fooddelivery)
url=http%3A%2F%2Feconomictimes.indiatimes.com%2Fnews%2FemergingJanuary 10th, 2015
businesses%2Fstartups%2Ffood-portals-flavour-of-the-season-for-venture-capitalinvestors%2Farticleshow%2F45829833.cms)

MUMBAI: After disrupting segments such as retail and taxi services,
India's internet startups are now turning their attention to the food
(http://economictimes.indiatimes.com/topic/food) business. Holachef,
Spoonjoy, Frsh, Yumist, Eatlo, Biryani 360
(http://economictimes.indiatimes.com/topic/Biryani-360), Tapcibo,
FreshMenu (http://economictimes.indiatimes.com/topic/FreshMenu) and
Foodyn (http://economictimes.indiatimes.com/topic/Foodyn) are among
the companies looking to build internet-first restaurants serving chicken
salad to home-made aloo parathas.
The nascent efforts have caught the attention of top venture capital
investors (http://economictimes.indiatimes.com/topic/venture-capitalinvestors) such as SAIF Partners
(http://economictimes.indiatimes.com/topic/SAIF-Partners), Accel,
Helion Ventures (http://economictimes.indiatimes.com/topic/HelionVentures), Lightspeed
(http://economictimes.indiatimes.com/topic/Lightspeed) and Matrix
Partners (http://economictimes.indiatimes.com/topic/Matrix-Partners),
with at least half dozen deals cooking.
Bengaluru-based FreshMenu, part of serial entrepreneur K Ganesh's
startup factory GrowthStory, is close to raising $3-5 million from
Lightspeed Venture Partners, people familiar with the matter told ET.
Similarly, Gurgaon-based Frsh, backed by seed-stage venture capitalist
India Quotient, is said to be in talks with Accel
(http://economictimes.indiatimes.com/topic/Accel) Partners and others

according to those in the know.indiatimes. These start-ups have been able to build initial traction rapidly.indiatimes. others distribution centres while a few are operating from one centre. "We were looking at the major markets which are basic necessities of life — roti (food). makaan (house) aur gaadi (and automobile)." said 29-year-old founder Manish Jethani.indiatimes. Bengaluru-based SpoonJoy.040 crore) by 2018. whose startup recently got funding from angel investors. Holachef. SpoonJoy. rising disposable incomes. more women joining workforce and rapid penetration of smartphones are all .com/topic/Frsh) declined to comment on fundraising.com/topic/FOOD) MEETS TECHNOLOGY The eating out market presents a large opportunity for entrepreneurs as it is expected to reach $78 billion (about Rs 408.indiatimes. There are different models.for a new round of funding.com/topic/Yumist) and Tapcibo (http://economictimes.com/topic/SpoonJoy) and Eatlo.com/topic/Eatlo) are serving as a marketplace for chefs. though. now food is a large market and even globally the next Uber is expected to come from this space. is getting 500 orders a day within six months of launch. Internet-first restaurants do not have any retail presence and they serve limited locations through a central kitchen. While Frsh (http://economictimes. there are at over three dozen startups that have come up across Bengaluru." said Tracxn co-founder Abhishek Goyal. Of all these. WHEN FOOD (http://economictimes.com/topic/Holachef) and Eatlo (http://economictimes. Yumist (http://economictimes. Hello Curry. with start-ups such as Yumist and Frsh employing their own chefs with pre-determined menus while others like Holachef (http://economictimes. which tracks data on startups. According to Tracxn. who has made angel investments in SpoonJoy (http://economictimes. "We have taken care of shopping and transportation with online companies.com/topic/Tapcibo) are also close to raising funds. The market is coming up at a time when growing urbanisation. which sells cut-fruit packs and salads.indiatimes.indiatimes. They also differ on distribution as some are building assembly kitchen. emails sent to Lightspeed and FreshMenu did not elicit a response until late evening on Friday. including Flipkart co-founder Sachin Bansal. according to consulting firm Technopak. About 61% of the market will remain unorganised.indiatimes. kapda (clothing). Mumbai and Gurgaon over the past two years. we felt food can have a large impact on the population.

"The idea is to make regular food affordable. whose firm expects to reach 1. SUPPLY CHAIN The companies in this business are also differentiating initially by focusing on different cuisines. which sells primarily health foods such as salads. "The interesting aspect in India is that new restaurants are getting formed at the same time when technology adoption is taking off. we became accessible to all customers in Gurgaon and can also control food quality through our central kitchen. a mobile application launched in October by former Zomato chief marketing officer Alok Jain. Spoonjoy (http://economictimes." said the IIT Delhi graduate. some start-ups have already managed to get a high number of repeat customers. All orders come over the internet." said Jethani. with the company taking cash on delivery.indiatimes. Although the market is still in its infancy." said Vikram Vaidyanathan. MD of Matrix Partners (http://economictimes. Some startups are also focusing on logistics by helping existing restaurants become more digital ready. In cities like Mumbai. "Consumers go to restaurant once a week. With emergence of these two scenarios simultaneously. as a Subway sandwich.creating demand for such a service. but found that model not scalable. but you want home-cooked meals for five days a week. We have seen great word-of-mouth communication from customers.com/topic/Frsh).000 orders a day in six months. 2530% price of menu items goes towards payment of real estate cost. which is priced at Rs 120-150. and 60% of our orders are repeats." said Jain. Yumist (http://economictimes. The business models are highly scalable and much more capital efficient than in most other sectors.com/topic/Spoonjoy) follows a subscription model and works with existing restaurants.indiatimes. Frsh (http://economictimes. Founder Badal Goel had earlier experimented with setting up kiosks in corporate cafeteria.indiatimes. should not cost more than Rs 40-50. focuses on comfort food items like rajma chawal and biryani.com/topic/Yumist). sandwiches and juices.com/topic/Matrix-Partners) India. MUCH DEPENDS ON BUSINESS MODELS. an IIT Roorkee graduate who earlier worked at FashionandYou. "When we went online.indiatimes. has seen its daily orders increase to 300 from 100 in July 2014. "There has been no innovation in delivery of food while there have been layers of innovation in discovery. Entrepreneurs and investors are drawn by the fact that the frequency of ordering food is much higher that shopping for other products. India is becoming a high delivery country." .

founder of tech incubator Ant Farm. The combination of food. His firm recently acquired food delivery start-up Meals on Wheels and is working with existing restaurants to create new brands in marinated meats and fish which will be sold exclusively online. technology and logistics will also have its own set of challenges. . Venture capitalists are exercising caution while they wait for the best execution model to emerge in this business. pointing to players like Zomato.said Rishi Khiani.