FreshMenu eyes revenues of ₹300 crore, to raise $20 million in Series C next year

FreshMenu, an online food delivery start-up, is seeking a revenue run rate of ₹300 crore within a year, during which time it also expects its operations to break-even.

The three-year-old start-up, founded by IIM graduate Rashmi Daga, has already raised two rounds of funding and is now getting ready for its third comprising $20 million, which will be its Series C round, by next year.

“We have raised $22 million so far and would be seeking additional funds of $20 million by next year. This would be part of Series C and we would be approaching funds supporting growth stage companies. In the next 12 months, we want to have a revenue run rate of ₹300 crore and should be profitable by FY18,” Daga said.

FreshMenu has investors like Lightspeed Venture Partners and Zodius Technology Fund as part of Series A and B. Restricting its expansion to new metro markets, FreshMenu has presence across Mumbai, Bengaluru and the National Capital Region. The portal wants to be conservative and consolidate in its existing markets and territories.

“We would rather double the kitchens in existing markets like Mumbai than go for new ones. There are challenges like execution of operations and people, apart from keeping pace between demand and supply in the food tech business,” Daga said.

Staying away from excessive discounting, FreshMenu would also be controlling costs by keeping delivery charges at 20 per cent of its sales. “Today, fixed costs like rentals are at 40 per cent, while food and packaging is another 45 per cent. We want to keep the delivery costs at the lowest, at 20 per cent of our sales,” she added.

Being a full stack model, whereby it controls both food and delivery, FreshMenu has created its network of kitchens in its existing markets and is now planning to double them in places such as Mumbai, taking up its count from the current 6 to 12, while in Bengaluru, it already has the maximum number of kitchens at 18.

With kitchens measuring between 1,200 and 1,500 sq ft, set up in commercial buildings, which also serve as delivery hubs, FreshMenu claims to do 12,000 food orders daily.

While controlling costs is a priority, the food tech player also wants to restrict discounting to a minimum to improve its bottom lines.

“Discount is a necessary evil in e-commerce and we want to make sure we do not give too many of them. While we do it sporadically, discounts would get restricted on our platform,” added Daga.

Besides, FreshMenu also believes in doing its own deliveries and while it lists its menus on online restaurant aggregators such as Swiggy, using third-party deliveries is restricted to 10 per cent of its channel sales.

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