Indian cloud kitchen startup Rebel Foods valued at $1.4 billion in $175 million fundraise

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Rebel Foods, which operates a large network of dark kitchens in nearly a dozen markets, is the latest Indian startup to achieve unicorn status.

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The Indian startup on Thursday said it has raised $175 million in its Series F financing round, which was valued at $1.4 billion, up from about $800 million last year. Qatar Investment Authority, the sovereign wealth fund of the State of Qatar, led the financing round with participation from existing investors Coatue and Evolvence. Rebel Foods also counts Sequoia Capital India and Goldman Sachs among its investors.

Rebel Foods is the 31st Indian startup to become a unicorn this year, as several high-profile investors including Tiger Global, SoftBank, Sequoia, Temasek double their bets to support young firms in the world’s second largest internet market . (And many more are exploring India. A16z made its first investment in an Indian startup this week.)


Rebel Foods Operates the world’s largest number of “Internet restaurants” in 10 countries. More than 45 brands, many of which are owned by Rebel Foods and many also from firms such as Wendy’s and Mad Over Donuts, specifically prepare food for delivery rather than serving it to dine-in or takeaway customers. The startup says it operates more than 4,000 of these internet restaurants.

The idea behind Dark Kitchen – also known as Ghost and Cloud Kitchen – is to make food serving operations more affordable. A restaurant is expensive to set up and operate because they, too, are pieces of real estate.

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Installing cloud kitchens allows partner restaurants and brands to move away from costly retail locations and streamline business by focusing only on food production.

“The big disruption caused by the cloud kitchen model is that you have to invest five real estate to run five different restaurants,” said Jaideep Burman, founder and CEO of Rebel Foods, in a virtual conference earlier this year. Needless to.” As carmakers produce dozens of models from a single factory, “using technology, supply chain, and workflow, you can actually build a kitchen for five restaurants,” he explained.

Many investors say the cloud kitchen model is also important for food delivery firms, restaurants and brands to reach the larger market. In many developing markets, including India, ticket sizes for lunch or dinner orders range from $3 to $5, which makes the current business model unsuitable for firms to turn a profit.

This explains why both Swiggy and Zomato – the two top food delivery firms in India – have made several attempts to set up their own cloud kitchens.

For example, Swiggy announced in late 2019 that it had invested in more than one million square feet of real estate space in 14 cities across the country to help restaurant partners of all sizes expand to more locations in their downtown and new cities. be able to help. Cloud Kitchen. The firm, which invested more than $25 million in its cloud kitchen business, significantly scaled it down after the pandemic hit last year. Like Swiggy, Zomato too has struggled to make a mark with its cloud kitchen efforts.

But the model is here to stay — and investors are buying. “Working in favor of Rebel is the loss of investor interest in single-brand entities, given that these brands do not have the ability to drive profitable entity economics from operating just one brand. Requires far more capital investment than brands that are part of a larger portfolio, where fixed costs are controlled.” informed of Indian news and analysis publication CapTable, which also scrutinized the fundraising talks last week.

Why have big firms struggled to make inroads with cloud kitchens? Nerdshala spoke to Ravi Golani, Chief Strategy Officer, Rebel Foods, who said, “One of the challenges they see with the cloud kitchen model is that there are many different strategies going on and they are producing different results.

“We are combining the best of both the digital and physical worlds – to understand how to scale a particular brand, to employ unit economics, and to ensure adequate supply chains and leverage technology. A different ball game altogether,” he said, adding that some other companies have been successful in acquiring some of these. Rebel Foods works with food delivery apps as its delivery partners.

“If you generally think of cloud kitchens, you would imagine five or so different booths in one kitchen. They have their own staff, production materials, and delivery tie-ups. In our kitchens, we What it has done is organize the entire layout by workflow instead of restaurant,” he said.

The startup said it plans to deploy the new funds to expand its international footprint and explore acquisition opportunities. It is also eyeing to become a public company within two years, said Piyush Kakkar, chief financial officer of the startup. It has a current annual run-rate of $150 million.

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