April 22, 2022: At present, food-delivery app, Freshmenu handles 8,000 orders per day in four cities, including Bengaluru, Gurgaon, Delhi, and Mumbai, with an average order volume (AOV) of Rs. 350. The food start-up receives about 85% of its revenue from food delivery aggregators such as Zomato and Swiggy, while the remaining 15% comes from its own direct-to-consumer application.
Bengaluru-based cloud kitchen start-up Freshmenu, is preparing to make a comeback with the ‘House of Brands Strategy’ after the Covid-19 epidemic hit the restaurant and food tech industry hard, destroying revenue and jobs.
In a statement, Freshmenu founder and CEO Rashmi Daga said the start-up plans to expand its cloud kitchen density in the four cities it currently operates in (Bengaluru, Mumbai, Gurgaon, and Delhi), while also focusing on creating new private label brands for new cuisine.
Founded by Indian woman entrepreneur, Rashmi Daga in 2014, Freshmenu is one of the first food delivery start-ups to adopt the cloud kitchen model in India.
Food Start-ups started home food delivery at a time when the service was still new to Internet customers in the country. Deepinder Goyal’s Zomato which was founded in 2010, did not enter food delivery until mid-2015, while Swiggy (Sriharsha Majety Nandan Reddy Rahul Jaimini) was established only in August 2014.
Freshmenu first started selling continental packaged food in urban areas of Bengaluru including MG Road, Koramangala, Indiranagar, Old Airport Road, and Ulsur and later expanded to new cities. It also started adding new culinary options over the years.
The start-up has so far raised about $ 25 million in equity and debt financing from Capital, Zodiac Capital, Lightspeed Venture Partners, Innovative Growth Story and many other investors.
Rashmi Daga said the company has also cut off $ 7 million in new funding from growth stage venture capital firm Florintri Advisors, which invests in tech start-ups, giving the company a 12-month runway. However, it plans to raise additional funds in the near future.
Regarding the company’s future strategy, Rashmi Daga said Freshmanu will also offer new subscription-based plans, focusing exclusively on Healthy Foods and Cato options. It is currently ₹ 999 to ₹ Up to 1,999 three-tier subscription plans offer the name ‘Freshpass’ which offers up to 25 meals in a package.
Currently, Freshmenu handles 8,000 orders per day in four cities, including Delhi, Gurgaon, Bengaluru, and Mumbai, with an average order volume (AOV) of ₹ 350.
The start-up receives about 85% of its revenue from food delivery aggregators such as Zomato and Swiggy, while the remaining 15% comes from its own direct-to-consumer application.
In FY21, ₹ 105 crore compared to ₹ % 0 crore less revenue was recorded. Rashmi Daga said the epidemic-driven recession has affected its operations.
However, the cloud kitchen start-up has already raised its annual revenue run rate (ARR) for the current financial year (FY23) to ₹ 200 crore, she added.
“We plan to expand to Hyderabad, Chennai, Kolkata, and Pune later. We have a very clear understanding that the cloud kitchen business should run at the city level and density is what drives revenue, so we want to expand the current density before we move to more cities, “Rashmi added.
Freshmanu has a fully operated model where he operates his own kitchen and last-mile delivery unit. It also owns three independent private food labels, including a dessert brand called Adesia, a health-focused brand called Green Cravings, and an Asian cuisine brand called Donbury.
Each has its own independent branding and is listed separately on food delivery aggregators such as Zomato and Swiggy.
The start-up is now planning to offer new labels based on plant proteins, grill platters, cereal bowls, BBQ, seasonal fruit and vegetable-based collections and the Zero Sugar Dessert, Daga said.
It also plans to expand into new West Asian dishes such as Egyptian, Moroccan, and Lebanese in the coming months.
“We clearly believe that there are great opportunities in private labels and we will work to introduce more of them. However, we do not follow the Thrasio acquisition model, instead we will create new brands in-house, “Rashmi added.
Freshmenu competes with other cloud kitchen brands such as Faasos and Box8 which have recently raised millions as the food tech segment has once again become a center of attraction for investors.
Rebel Foods, a parent company of Faasos, joined the Unicorn Club in October 2021 after raising $ 175 million in Series F rounds led by the Qatar Investment Authority.
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In December 2021, Box8’s parent firm Eatclub raised $ 40 million from Tiger Global, valued at $ 340 million, while food delivery brand Biryani By Kilo (BBK) also acquired $35 million in a funding round led by Falcon Edge venture capital arm Alpha Wave Ventures in November 2021.