The year 2017 was buzzing with activity for food startups across India. The year saw a number of successful startups launch and achieve greater heights. However, there were a few that had to shut down for a variety of reasons. These stories became a cautionary tale for the others. It is certain that there is likely to be stiff competition amongst the main players in the food ordering and delivery segment, namely Zomato, Swiggy, UberEats, Google’s Areo, and FoodPanda. It is also clear that newer food tech startups will have to fight for a seat at the table. So as the New Year is fast approaching, let us look back at the 12 great moments in the Indian Food Startup market in 2017.
- OLA acquires FoodPanda
The Indian ride hailing firm, Ola acquired the Indian division of the food ordering and delivery company, FoodPanda for an undisclosed equity stake on December 20. Although the acquisition is not Ola’s first foray into the food delivery industry; it had to shut down its pilot Ola Cafe due to an unimpressive performance. Ola’s reported $200 million investment in FoodPanda, will make the company a worthy competitor for other industrial players such as Swiggy and Zomato.
- Swiggy’s acqui-hires 48 East
On December 13, one of the top 3 online food order and delivery companies in India, Swiggy, announced that it has acqui-hired the Bengaluru-based gourmet Asian food startup, 48 East. The startup was founded by food industry veterans Joseph Cherian and Nabhojit Ghosh, in 2016. It offers a new menu every week and operates five kitchens, takes up to 9,000 orders a month, and caters to over a dozen areas in Bengaluru.
The acqui-hiring is a part of Swiggy’s plan to expand its operations across the country. Over the next 6 months the company plans to introduce 40 restaurant partners to newer neighbourhoods across the country via Swiggy Access, which is an initiative under their “New Supply” business line to provide their customers a wider variety while at the same time allows their restaurant partners to establish kitchens in areas where they don’t operate. Swiggy will offer the restaurants a basic set-up with required amenities and will not charge any fees for the premises offered.
- Holachef raises additional funds
The Mumbai-based food tech startup Holachef raised Rs 8.95 crore ($ 1.38 million) in additional funds through a mix of equity and debt. This came after the company had raised approximately $5 million (over Rs 32 crore) in series B funding in April and October 2017. The company was started by Saurabh Saxena and Anil Gera in 2014. The company delivers ready to eat home-cooked food to its customers. The company employs in-house chefs to prepare a range of signature dishes, which include Indian and global cuisines, in addition to desserts, beverages, munchies, and salads. Currently, the company operates only in Mumbai and caters to over 100 pin code areas. Holachef is targeting doubling its revenues by financial year ending 2018.
- Good Dot wins PETA Award
The Udaipur-based food tech start up was conferred the trailblazing business award by People for Ethical Treatment of Animals (PETA) on December 17. The startup was recognized for developing “delicious, affordable plant-based meat alternatives”. The company uses special technology to convert healthy grains and plant proteins into food that tastes and looks similar in texture to meats like chicken and mutton.
- FBohri Kitchen receives angel investment
The angel network platform Venture Catalysts has invested an undisclosed amount in the food tech startup Bohri Kitchen. The seed round in the company saw participation by a number of investors including Anuj Puri of Venture Catalysts Qatar, Abhishek Agarwal of Rockstud Capital, Anirudh Damani of Artha India Ventures, F&B veteran Riyaaz Amlani and food chef Rahul Akerkar. The company was started in 2014 by Munif Kapadia and his mother, Nafisa. It offers a cuisine that is unique to the Dawoodi Bohra community to food connoisseurs through a specialized home dining experience. The company plans to use the investments to upgrade its existing infrastructure and move into a bigger central kitchen as well as hiring skilled workers and standardising the menu.
- Yumist shuts down as funding dries up
The Gurgoan-based cloud kitchen company, Yumist, shut down in October 2017, becoming the latest addition to the graveyard of failed startups. The company decided to close shop after it failed to raise a subsequent round of funding. The company was founded by ex-Zomato Chief Marketing Officer, Alok Jain, in 2014 and had successfully raised funding of approximately $3 million from investors such as Unilever Ventures and Orios Venture Partners. The company provided on-demand meals prepared in their own kitchens . The startup was mostly focused on catering the Delhi-NCR region. While announcing the shutting down of the company in a blog post on their website, the founder attributed the failure to a number of internal and external factors such as a premature launch in a second city, commitment to high growth, employing a high burn model, and the reluctance of investors to invest due to the 2016 slump in the food tech market.
- Authenticook gets investment from Booking.com
The Mumbai-based food tech startup Authenticook announced in June 2017, that its securing funding of Rs 1.45 crore from Booking.com. The company was founded in 2015 by co-founder Ameya Deshpande. The startup helps people eat traditional home-cooked food with local families in cities and villages in India via mobile app booking. The company competed for the Rs 1.45 crore grant in a contest run by the world’s greatest hotel aggregator, Booking.com. The contest that saw participation from over 700 startups from around the world. The company plans to use the funds to improve their marketing strategies, creating operations teams and upgrade their existing technology. The company hopes to break even in 2019 and is aiming to get additional Series- A funding sometime in 2018. Also by 2019, the company is targeting an expansion to 75 cities.
- The Princess of UAE invests in Mumbai startup firm
A Mumbai-based food tech start up, Wegan Foods, caught the attention of Her Royal Highness Sheikha Arwa Al Qassimmi. The Princess was impressed by the company’s intention to hire women from financially weak backgrounds in order to uplift them. Although the Princess does work with many charities across the nation, this investment (the amount remains undisclosed) is her first investment in an Indian company. The startup eventually plans to expand across the country, starting with the four metropolitan cities.
- Wow! Momo looks abroad
The Kolkata-based food start up Wow! Momo announced in Jan 2017, that it was planning to expand to countries like US, UK, Dubai, and Singapore by establishing branches there and exporting frozen Momos. The delicacy has gained popularity in India and Nepal. The company is currently operating in Kolkata, Bengaluru, Chennai, Kochi, Pune, Delhi, Gurgoan, and Noida. The company plans to expand to at least 500 cities by 2021. The startup was one of the very few businesses to make a profit during demonetization.
- Faasos received $6.3 million in Series D funding from investors
The Pune-based food delivery startup, Faasos, raised $6.3 million in Series D funding from investors such as Lightbox Ventures II, Lightbox Expansion Fund, Sequoia Capital India, RuNet South Asia, and RB Investments. The company runs on a cloud-kitchen model offering 4 in house brands on its platform in contrast to the multi brand marketplace model it adopted in 2015. The company was founded in 2004 as a QSR chain and had raised Rs. 200 crore in December 2015. In addition to this, the company also partnered with Google on the launch of its home services and food delivery app, Areo.
- UberEats launched in India
The cab hailing service, Uber, launched UberEats, a food delivery service akin to the likes of Zomato and Swiggy in order to tap the $ 5 billion unorganized sector in India. The company partnered with a number of restaurants to service customers. While the initial launch was in Mumbai, the service soon expanded to other cities as well.
- Google Enters the food services market
In April 2017, Google launched Areo, an app that allows users to order food from nearby restaurants, schedule appointments with local service professionals like electricians, plumbers etc. The app was launched on Google Play and currently only works for residents in Mumbai and Bangalore. The launch of the app was Google’s formal entry into the restaurant and home services market in India. The launch partners included UrbanClap and Zimmber on the services front and Faasos, Box8 and FreshMenu on the food delivery front.
(Picture Courtesy: Startuptalks.in)