does Rebel Foods have a recipe for success?
last week saw the minting of three new unicorns in the Indian startup ecosystem. the latest of them, and the 31st of the year, is rather unique. it began its journey delivering a variety of rolls to hungry office goers with little time on their hands and is now worth $1.4 billion. it is none other than the world’s largest “internet restaurant” chain, Rebel Foods, which raised $175 million in its latest round of funding. next on its plate might be an IPO.
so, how does a roll-maker become a billion-dollar company?
the answer lies in technology and running a tight ship. Rebel runs a network of what it calls “internet restaurants” that are essentially no-service, only-delivery kitchens, aka cloud kitchens. the savings on overhead costs in not paying rent for seating space, salaries to waitstaff, utilities, etc. add up significantly across the 4,000+ kitchens it operates. additionally, one kitchen can serve multiple areas through effective on-demand distribution and delivery enabled by technology. this has helped it sustain during the pandemic, which saw many restaurants suffer due to their fixed costs while sales stagnated.
the pandemic also led to a boom in food delivery services, which played right into the hands of this model. that is why the 10-year-old company which owns brands such as Faasos, Behrouz Biryani, Oven Story, Sweet Truth, etc. ballooned to an $800 million valuation last year and has nearly doubled it now.
of course, Rebel’s success, particularly in the ‘new normal’ of the post-pandemic era hasn’t gone unnoticed. the likes of Swiggy and Zomato have purchased millions of square feet of real estate in order to set up cloud kitchens of their own.
top investors from across the globe smell opportunity for growth in the Indian food delivery market, and are placing their bets. Curefoods (spun off from Curefit) which operates cloud kitchen brand EatFit recently raised $13 million to expand its offerings. Tiger Global-backed Wow! Momo is looking to expand in a similar direction after recently raising $17 million. a relatively new player following the model, Hygiene BigBite, also raised $15 million subsequent to Rebel’s raise.
Rebel, the leader, is now looking to explore overseas markets such as West Asia (especially Saudi Arabia), Latin America, Russia, and Europe. it also forged a strategic partnership with Wendy’s to expand the latter’s presence in India. it sure looks like they’re cooking up a delicious business.