India continues to be the fastest growing economy in the world with some of the factors like young population, increasing disposable income, demographic changes which actually turns right the consumption and also offer restaurants and hospitality business a considerable opportunity to grow. Despite all the right ingredients we still do not see much of VC and private equity investment in the brick and mortar restaurant business. And, we can say that 2021 was the year of tech-led investments where investors have showered their blessings on delivery, cloud kitchen, tech-enabled restaurants looking at the growth this segment holds.
Also, there is a sudden shift in the venture capital business. In the last two three years a lot of venture capitalist have invested in the food technology or the restaurant space. Majorly there were two things happening- the large ticket venture capitalists, people who were able to invest about $60 MN or VCs who are back investing traditionally into the core technology products and hence, food and food service at large doesn’t feature as an area of interest to them.
From brands like Zomato, Swiggy that has become the market leader in delivery to home grown cloud-kitchen brand Rebel Foods that entered the unicorn club with the latest round of funding; each one of them received great appreciation from the investment circle.
“The food-tech space has evolved towards better personalization, innovation, and complete transparency which Rebel Foods continues to pioneer. With this round of funding, we will continue to serve newer customer food missions powered by technology and automation,” said Ravi Golani, Chief Strategy Officer, Rebel Foods recently during its announcement that it has raised USD 175 million in a Series F round led by Qatar Investment Authority (“QIA”).
According to a report, the Indian food service delivery market is expected to more than double to $13 billion (Rs 93,600 crore) by fiscal 2023 from $5.2 billion (Rs 37,440 crore) in fiscal 2020. With no physical presence, less commercial involvement and working as an internet restaurant wherein you can get the food delivered at the comfort of your home, cloud-kitchen segment is projected to become a $2 billion industry in India by 2024, as per a report by RedSeer Management Consulting.
Also, if we look at current market trend, more and more restaurants are happy sitting at home and binging on their favourite food. This has also led tech-led businesses to get investors attention.
“There is a huge opportunity in the cloud kitchen model because it allows a lot of aggregation and local food. I think at the end of the day, food is still local,” shared Shanti Mohan, Founder, LetsVenture by adding that this concept is a combination of asset light versus somebody managing the infrastructure.
Commenting on the same Neelesh Bhatnagar, MD, NB Ventures, “We are excited to partner with Bigspoon, who are transforming the cloud kitchen landscape in Tier-II and III cities, with fresh-pier food and tech-led disruption in the F&B space. Our expertise in the Food-tech sector and their focus on a full-stack solution has great synergy.
NB Ventures recently invested Rs 15 crore in Ahmedabad-based multi-brand cloud-kitchen BigSpoon .