The New Delhi-based real estate company, Kitchens Centre that facilitates cloud kitchen businesses by providing infrastructure and technology has caught the attention of investors.
The dark kitchen platform renders fully equipped and compliant kitchens along with the essential technology to delivery-only restaurants.
The company has garnered $500k funds in the seed funding round. AngelList India led the investment round of the startup. Other investors, who participated in the funding round, include Utsav Somani, Partner at AngelList India, Jake Zeller, Partner at AngelList, Jonathon Swanson, Co-Founder at Thumbtack, Ankush Gera, Founder at Junglee Games, and Revant Bhate, Co-Founder at Mosaic Wellness, according to the company's official statement.
The realty startup plans to use funds on increasing its presence in new geographies, forming on strategic collaborations, enhancing organic revenue streams for brands and employing the best talent across functions.
How Kitchens Center Helps Brands Establish
Less-than-a-year-old startup was founded by Lakshay Jain in 2019. The firm gives turnkey solutions to renowned and emerging brands throughout India with ideal locations, having fair demand from consumers. It creates an entire set up for cloud kitchen entities, providing commercial space, kitchen infrastructure to assisting with branding, order management, delivery and maintenance services with utmost hygiene measure.
The company is spread across northern India and has partnered with prominent brands like WOW! Momo, Burgrill, Asian Haus, POMP, and a few others coming on board.
The company has recently acquired a tech firm, Posify that technology-based management solution for F&B brands. It asserts that the acquired company will help in its operations.
Aligning with the startup's technology-led approach, the company permits brands to manage orders on a single platform while also helping with inventory management, billing and delivery tracking among other things.
"Apart from significantly cutting down on the Cap-Ex (capital expenditure) and Opex-Ex (operational expenditure) of the brands, the network effort of things like order gapping, CRM support, customer data helps them achieve an average 25 per cent increase in sales and better payback periods after partnering with us," Jain said.
Taste and hygiene are two preliminary strands that the company focuses as similar to other F&B brands. Scrutinising the present scenario, the startup believes that it has become crucial to facilitate brands in delivering hygienic and healthy food to consumers. With the aid of its new shareholders, it will establish hygienic kitchens for brands throughout various cities with high standards of sanitation.
Cloud Kitchen- a Red-Hot Market of India
Despite being in a nascent stage, the cloud kitchen industry has thrived and created its presence and developed liking amongst eaters. A latest report by Redseer Consulting exhibits shifting trends in consumers, who have subscribed to cloud kitchen apps. The report shows that subscription users of cloud kitchen apps show stronger platform loyalty (vs on-demand users) even when preferred dishes are unavailable.
The report also stated that when preferred dishes are unavailable, subscribers of on-demand cloud kitchen apps are much more likely to still buy something else on the platform. In comparison, non-subscribers/on-demand users are highly likely to switch to a different platform in a similar situation, indicating lower loyalty.
Another report of Redseer Consulting reveals that restaurants have witnessed 30 per cent growth in business along with other benefits after partnering with online aggregators. Online partnerships have enabled restaurants to increase overall top line by 30 per cent via a large consumer base and strong brand impact. With improved kitchen utilization, online partnerships have also enabled restaurants to improve their bottom-line.
These revelations hint that the cloud kitchen is outweighing traditional restaurant models. Being a cost-effective model, it entices food entrepreneurs and in turn, stimulates their participation in the cloud kitchen industry. As the industry is budding and accruing a fair profit to players, other industries such as real estate also shows interest in it.
Business Transactions not Halting Amid Lockdown
When the Indian government has done a nationwide lockdown, its impacts can be felt in every sphere of life, from businesses to consumers to education. As a result, the businesses have weakened facing a cash crunch and looking for external aid.
In such uncertain times, when keeping the business afloat has become a main problem for all businesses. The companies are actively seeking the help of angel investors, high-net worth -individuals (HNIs), venture companies and private equity. The capital infusion made by these investors anchor the firms and help normalise its operations.