Faasos cloud kitchen business model in India

fassos cloud kitchen

Faasos, an online food delivery company, based in India was started in 2011. It takes orders from customers both from its websites and App. It’s the first company which started vertically integrated business where all the three stages of ordering, distribution and order fulfillment are done by the company itself.

The company was founded by Jaydeep Barman and Kallol Banerjee together. Both are IIM graduates and did their PGDM from IIM Lucknow.

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In November 2011, Faasos got its first funding of $5 million from Sequoia. It also got some fundings later in 2015 and 2017, which helped to establish Faasos itself and stand out from others (zomato, swiggy, Foodpanda etc.) on its own business model.

Expected funding from investors for Faasos

According to the recent news, Faasos, which is now run by Rebel Foods, is going to raise $75-$100 Million in the coming financing round. Many of the companies such as Temasek, Goldman Sachs, Falcon Edge and Canadian Pension Plan Investment Board are coming forward to back Faasos, an Indian cloud kitchen platform. If this deal becomes successful then the 8 years old cloud kitchen platform can be valued at $ 400 million.

Apart from the new investors, old investors such as Sequoia and Lightbox are also planning to invest around $ 20 million in the new financing round. Rebel foods is planning to raise so much of funds but at this point of time food delivery sector is already bedraggled with enough funds. The company is already in losses and had already projected revenue of around Rs 320 crores and expects itself to be profitable soon.

How Cloud kitchen Platforms is better business?

Cloud kitchen platforms like Faasos have a good margin because it has its in-house operations whereas food aggregators such as zomato and swiggy do not have so much margin. This is because cloud kitchen platforms have their own central kitchen to service their multiple brands.

But it is not occult from anyone that zomato and swiggy contribute around 50%-60% of the orders of the Faasos. And, recently, we saw that swiggy is in talks to buy UberEats. So if such a market player like Swiggy comes into action to create its own cloud kitchen brands then where faasos would find itself? Rather, it would become a lot more challenging for rebel foods to be in the market.

Faasos Elite Membership and rewards

Faasos Elite Membership is a loyalty reward given to its old customers. It costs Rs 149 for a year but it provides a lot of benefits to its Elite members by delivering their orders first and many other credits and discounts especially designed for Elite members.

Apart from Elite membership, it also offers faasos referral code reward programs where a person gets rewards for referring their friends.

Wrapping it up

The CEO of the company, Jaydeep Barman, however declined to say anything about the talks about investment. But he said that the process to get a funding of around $75-$100 million is in talks.

Rebel Foods is spreading itself inside the nation and tapping abroad markets too, with a specific spotlight on the UAE, Indonesia, Thailand and Vietnam, with the United Kingdom additionally planned in the not so distant future.

Posted on: April 26, 2019, by :

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