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Online food delivery start-up FreshMenu is set to close a Series C fund-raise of $50-55 million from new investors in the next few weeks, putting to rest speculation about its imminent sellout.
“We are due to close a Series C fund-raise of $50-55 million in the next few weeks from new investors. The funding will go towards expanding into new markets over the next few months. It is obvious that we are not getting acquired,” Rashmi Daga, founder CEO of FreshMenu, told BusinessLine .
The start-up is gearing to launch operations in Hyderabad, the second largest food delivery city after Bengaluru, in two months, followed by Pune and Chennai in six months, she said.
The start-up has established a network of 37 kitchens in its three markets where it delivers 20,000 orders a day in 32 minutes on average. Bengaluru accounts for 12,000 orders a day while Mumbai and Delhi generate 4,000 orders daily.
“FreshMenu is the biggest single brand in Bengaluru after Dominos. We are an online food company, with our own kitchens, a team of chefs and a fleet of delivery boys. We control the entire process from sourcing ingredients, creating a new menu everyday to cooking and delivering food. Eighty per cent of our sales comes from our app and website and 20 per cent from aggregators such as, Swiggy, Zomato, Uber Eats, and Foodpanda,” said Daga.
‘Fit N Fab’
The start-up has partnered with Paytm to offer meals at ₹49, where customers receive a cash-back of ₹50 for a ₹99 meal if they pay using Paytm. The recently-introduced ‘Fit N Fab’ range of salads, snacks, soups, low-carb (keto) baked meals and high-protein dishes, are the second highest selling range after its ‘Mains’ range. Daga expects ‘Fit N Fab’ to contribute to 70 per cent of total sales in five years. FreshMenu’s average order value from its seven lakh customers is ₹300, driven largely by lunch orders.
Airport restaurant
The start-up’s experiment at creating an omni-channel presence with its first 70-seater all-day café and restaurant at Kempegowda International Airport which opened last October in Bengaluru, will end when it shuts down in October. Before its launch, Daga had said that the airport restaurant would serve as an ‘experience store’ that will bring FreshMenu close its customers looking for ‘on-the-go’ food choices.
Asked if the experiment had failed due to poor customer response, she said: “The airport outlet was a one-year branding opportunity and since we have achieved our branding objectives, we are shutting it down.” Yet to achieve its targeted revenue run rate of ₹300 crore in FY2018, Daga said, “We will achieve it this fiscal. The good news is that we have grown revenue by 75 per cent in FY2018 while losses have remained the same. We will continue to grow our revenue and halve our losses in FY 2019.”
The online food delivery market grew 150 per cent to $300 million in GMV in 2016, more than doubled to $700 million in 2017 and will continue its momentum to hit $1.5 billion in GMV by December 2018, according to RedSeer Consulting.
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