Ankit Nagori, a former Flipkart executive and co-founder of India's largest gym chain, Cult.fit, is betting big on his new venture Curefoods to expand the country's network of cloud kitchens.
Curefoods, which began operations in 2020, claims to be India's second-largest cloud kitchen player in terms of footprint, with the most manufacturing capability in the fresh food space. A 'cloud kitchen' is one that does not have a dine-in option and only accepts food orders via an online ordering system.
The company plans to open 50 kitchens in 7-8 cities by 2023. It plans to expand to 50 cities in the next five years while remaining profitable. This year, it intends to add 500 new employees to its workforce.
“We are moving towards profitability very fast and will turn profitable in by June this year,” said Ankit Nagori, founder of Curefoods, in an interview. “We will be ready to go public in two years.”
Curefoods claims to have over 150 cloud kitchens in 15 cities across India. It processes approximately 40,000 orders per day. By the end of 2023, the goal is to handle 75,000 orders per day. In December of last year, the company received approximately 1.1 million orders per month.
According to Nagori, the company has $63 million in annual recurring revenue (ARR). He stated that the company expects to reach Rs 1,000 crore ARR by the end of the year.
When asked about future funding plans, Nagori stated that the company is well-funded, with $110 million in equity and $20 million in debt. Iron Pillar, Chiratae Ventures, Sixteenth Street Capital, Accel Partners, and Flipkart co-founder Binny Bansal are among the investors.
Rebel Foods, Biryani By Kilo, Box8, and FreshMenu are among the competitors.
The company operates five manufacturing facilities in Delhi, Mumbai, Bengaluru, Chennai, and Pune. It supplies nearly 70% of its finished products to its cloud kitchens from these locations.
Zomato and Swiggy fulfil approximately 70% of its orders. The remainder are delivered via its own network. It expects its own network to be approximately 40% complete by the end of 2024.
Desserts, pizza, and biryani account for the majority of its sales. EatFit, CakeZone, Nomad Pizza, Great Indian Khichdi, Sharief Bhai, and Iceberg Ice Creams are among the brands available at Curefoods.
EatFit processes 450,000 orders per month, while Cakezone processes 250,000 orders per month. These online-only brands are expected to grow to be very large brands, with the company hoping to grow 4-5 times over the next five years.
When asked about the impact of the uncertain economic environment on the cloud kitchen segment, Nagori stated that the category would be unaffected because the demand for food at home and outside is so high. However, he stated that discretionary spending is decreasing. Some of the factors include a slowdown in the overall industry's growth rate, job losses, and profitability issues.
“For us, it means that we also need to be super careful about how we market our products,” said Nagori. “We also don't want to do a lot of experiments and rather focus on what's already working for us.”
According to experts, the food delivery market will triple in the next five years. It will increase from three million to eight to nine million orders per day.