The city is fast becoming a hotbed for food tech start-ups. With a huge multinational crowd, new players are entering the market across categories ranging from food aggregators to home chef providers to what they call the kitchen in the cloud.
In fact, the city is ranked just behind early starters Bangalore and Mumbai as the biggest test bed for food tech start-ups in India. “Within NCR, Gurgaon definitely offers a bigger market than South Delhi, and is at least four times the food tech market in Noida,” said Rajesh Sawhney, founder, GSF tech accelerator. Sawhney has also founded Innerchef, which raised $1.66 million.
The start-ups might be serving food, but they identify themselves as tech firms, by marrying food and technology. All back-end processes are technology oriented, right from order to dispatch. Some are also working on ways for customers to track their food real time.
As of now, food tech is categorized in three categories — aggregators such as Zomato and Swiggy, online delivery for companies which have a physical presence, and kitchens in the cloud. There are almost 30-40 players in Gurgaon’s fast growing food tech business.
The demographic profile of Gurgaon residents is what makes the city most attractive to entrepreneurs and investors alike. “I think the reason why Gurgaon is booming with food entrepreneurs is that consumption of new trends is higher here than in any other city,” said Kabir Jeet Singh, founder BurgerSingh, a Gurgaonbased start-up.
Singh also founded the Pint Room, a national brewery chain. BurgerSingh has recently raised half a million US dollars in Series A funding, and is planning to take its count of stores to 10 in Gurgaon by the year-end. Singh said, a Gurgaon customer spends almost 25% more on everything compared to other Indian cities, especially on food. Foodport, another Gurgaon-based start-up that has recently got $100,000 in its pre-series funding, is also cashing in on high-income corporate customers in the city.
Foodport, which has been around since January this year and served around 2,000 customers, is a ‘kitchen in the cloud’. It’s a model where players run their own kitchen, instead of outsourcing or aggregating. “Gurgaon serves as the right market for our business, given the corporate cosmopolitan crowd fits in right for our offering,” said Aman Gupta, co-founder, Foodport.
However, angel funding does not guarantee success, especially in a crowded market like Gurgaon. Hence, these entrepreneurs are looking at different ways to add value to their offerings, and not follow the herd in giving discounts to acquire customers. Foodport, for instance, delivers only in time slots, say, for instance, 7-11pm for dinner, with deliveries done only in batches, which helps the brand cut costs. In this model, when one choses a delivery slot, say 12-1 or 1-2, the slot closes 45 minutes before. So, if you want food between 12 noon and 1pm, you will have to order before 11.15am.
Sawhney said brands either need to be really innovative, or have deep pockets to last in such a market. He added the kitchen in the cloud model makes it easier, as it gives the company a control over food quality and taste, both very important factors, while rentals are kept to a minimum by locating the kitchen off high street.
Bueno, an online food delivery company is also promising its own kitchen and quality food. Rohan Arora, founder at Bueno, is counting on premium pricing for quality food as its sustainability factor. Bueno has recently raised $600,000 in pre-Series A funding. Bueno started with the online delivery model in April 2015, and has had 30,000 customers till now. Earlier, it had a physical store in Cyber Hub, which it shut down as it turned unsustainable.
So far, customers are eating out of their hands. “I think brands like Innerchef have come up with the answer to the question ‘What’s for lunch?’ for a corporate employee. They give more options and also help people eat healthy,” said Sumesh Menon, co-founder, WOO. “It is a great service for a working couple like us to have food delivered at the doorstep. Plus, in the last six months, so many options have sprung up across price points,” said Rajat Harlalka, who runs a software development firm in Gurgaon.
One of the biggest angel investors in town, Rajesh Swahney, said, “There are only 3-4 start ups (out of 30 food tech firms that have sprung up in Gurgaon) that will make the cut. Angels are enthusiastic, but careful. Over the next one year, the industry will see consolidation and a couple of them will take it to national level.”
“The ‘online delivery box’ model is very spicy right now. It will only get hotter, because people are getting busier, which does not give them time to get back to their kitchen,” said Vikram Upadhaya, angel at GHF accelerator. He added Gurgaon is the biggest Indian market in terms of customer validation.