cloud kitchen startups: Cloud kitchen firms cut their losses to cook up healthy numbers

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India’s cloud kitchen startups found FY24 to be a more stimulating year, as most of them not just clocked revenue growth but also reduced losses by controlling expenses, including those on marketing and employees, according to the statements of these firms sourced from the Registrar of Companies (RoC).However, in the ongoing fiscal, industry executives said high inflation could put the margins of these firms under pressure–a caution already sounded out by listed quick service restaurant (QSR) companies.

Rebel Foods, among the largest cloud kitchen startups in the country, posted a 20% year-on-year revenue growth in FY24 while cutting down losses by 42%.

Binny Bansal-backed Curefoods clocked a 53% topline growth and narrowed its loss by 53%.

Alpha Wave-backed Biryani by Kilo and Bengaluru-based Freshmenu also posted similar trends. Notably, Lightspeed-backed Freshmenu, which was on the verge of being acquired in 2019, has charted a comeback story, crossing the Rs 100-crore revenue mark in FY24.


In 2023-24, the company posted a 73% increase in operating revenue from the previous year at Rs 121 crore. It reduced its net loss by 20% to Rs 8 crore in fiscal 2024. During the year, Freshmenu expanded its cloud kitchen presence across key geographies.

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Rebel Foods, which operates brands such as Faasos, Behrouz Biryani and Oven Story, saw its employee benefit expenses reduce marginally to Rs 394 crore from Rs 405 crore. The brand had laid off 2% of its workforce in January 2023.Its advertising and sales promotion cost also came down to Rs 133 crore from Rs 197 crore in FY23.

Earlier this month, Rebel Foods announced closure of a $210 million funding round led by Singapore’s sovereign wealth fund Temasek, in a mix of primary and secondary share sales.

Curefoods, which runs brands including EatFit, Cake Zone and Nomad Pizza, significantly reined in its marketing costs, spending Rs 53 crore on advertising and promotion during FY24, compared with Rs 107 crore in FY23.

Biryani by Kilo also brought down its advertising expenses by 15% year-on-year to Rs 28 crore.

“Rising costs has been a concern this year as well…as much as it was in the last fiscal. We had hoped it would cool down but it didn’t happen. Prices of raw materials such as edible oil, wheat, vegetables have impacted the most, and in the food services market, passing on the cost increases to the consumers isn’t as easy as it would be for biscuit or ketchup makers,” a senior executive at a cloud kitchen firm said.

“Cloud kitchens have still managed to grow because the scale is comparatively smaller and it addresses the demand for more choices for the consumer…different companies will grow at different rates but it will continue,” the executive said.

In numbers Cloud kitchens chart efficient growth_Dec 2024_Graphic_ETTECH_2ETtech

Gurgaon-based Zomato’s food delivery gross order value (GOV) grew by 23% year-on-year in FY24 to Rs 32,224 crore. In its past earnings calls, the company’s management had played down the impact of inflation and consumption slowdown on its business.

Its rival, Swiggy’s food delivery GOV grew by 15% in FY24 to Rs 24,700 crore.

“While larger restaurant companies have flagged a slowdown in growth, aggregators haven’t felt the pinch because a lot more growth is coming from new restaurants and cloud kitchens that are expanding across the board,” an executive with one of the food delivery firms said.

According to a report by the National Restaurant Association of India (NRAI) earlier this year, the growth in the cloud kitchen sector during the period 2019 to 2024 was in the 30-40% range, and the outlook for the next four years is compound annual growth rate (CAGR) of 35%.



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