Curefoods, started by Cure.fit co-founder Ankit Nagori, has acquired six cloud kitchen brands and is looking to onboard 25 more as it seeks to build a house of food brands.
Nagori recently raised $13 million led by venture firm Iron Pillar, Nordstar and Flipkart co-founder Binny Bansal to acquire and incubate growing cloud kitchen platforms and also closed a $10 million debt round from Alteria Capital. It will use this money to expand its cloud kitchen footprint across multiple cities and build backend technology to manage these.
Apart from its original brand Eat.fit, Curefoods has now acquired six, inked three licensing agreements and signed 15 letters of intent (LoIs). While the acquired brands include CakeZone, MasalaBox and Paratha Box, it also has exclusive online franchising rights for YumLane, Sharief Bhai, and Aligarh House.
“If you look at the top 10 brands nationally on Zomato and Swiggy, they are all American—from KFC to Pizza Hut to Burger King. But if you look at Bengaluru’s top 10 brands you will see local brands—Meghna’s Biryani, Truffles, Sharief Bhai and so on. The scale wasn’t there before, but we have the capability to scale these brands.” Nagori told Moneycontrol in an interview, adding he would only acquire profitable companies.
While Rebel Foods, which owns Behrouz, Ovenstory and Faasos, has built cloud-kitchen brands by starting each brand, Nagori plans to acquire online brands listed on food-delivery platforms Swiggy and Zomato.
This approach is similar to that of US-based breakout startup Thrasio, which acquires top-rated and fast-growing sellers on Amazon, helping them with technology, digital marketing and sales chops to turbocharge growth.
While eight-nine of these brands will be national, the rest will cater to regions such as South, West, North and East. It will look at a mix of pizza, biryani and north Indian cuisine, apart from categories like dessert.
Nagori is basing his optimism on the growing addressable market, as more and more Indians order food online.
He estimates that Zomato and Swiggy together deliver three million orders a day—a number that can double over the next decade. It will still be far lower than the tens of millions that a Meituan does in China or a DoorDash does in the US.
“This means there is 3 million worth new supply that has to be created. The US brands supply chain is already vast and exhuastive, a new supply of food brands has to come in,” he said.
Zomato and Swiggy have also scaled significantly. Nagori estimates that there are 300 food brands on these platforms that do more than Rs 20 lakhs of business a month. There are 100 brands that do more than 5 crores of sales a year.
“We need to buy 25 out of 300 to get to a sizeable business. If we buy 25 brands with 3 crore of revenue a year—we need to scale it to 5x over 3 years, with better marketing and significant cloud kitchen infrastructure. So that means a revenue run rate of $200 million in 24-36 months” he said.
Last year, Nagori acquired a 70-80 percent stake in Eat.fit, the cloud kitchen focused on healthy eating, in exchange for his 7.6 percent stake in Cure.fit. While Eat.fit had to shut outlets in many cities during the pandemic, it will have 70 by February.
Before co-founding Cure.fit, Nagori served as the chief business officer of online retailer Flipkart, and was among the key leaders in the company.
Categories: Corporate M&A