BOX8, a cloud kitchen startup, has secured $40 million in a Series D round of funding backed by Tiger Global Management. Along with the fresh capital, the company is changing its brand to EatClub Brands. The valuation of the Mumbai-based startup has not been officially disclosed. However, sources familiar with the deal said, the company has been valued at $340 million following the funding round.
EatClub Brands was founded by Amit Raj and Anshul Gupta in 2012 as BOX8, a cloud kitchen services startup that offers Indian cuisine and ‘meal boxes.’ Currently, the startup is a full-stack cloud kitchen firm with eight brands operating across over 150 kitchens. The startup seeks to leverage the freshly invested funds to onboard top talent and set up teams that will assist it to expand its business to more than 500 kitchens across 15 cities.
Its cloud kitchens are located across five Indian cities which include Bengaluru, Delhi-NCR, Mumbai, Pune, and Hyderabad, as well as serve 1.5 million meals every month from brands such as BOX8, GLOBO Ice Cream, MOJO Pizza, and ZAZA Biryani. MOJO Pizza has grown to become the largest homemade pizza delivery brand, with a revenue of more than Rs 150 crore.
Amit Raj, Co-founder of EatClub Brands (formerly BOX8) in a statement said, “We have deliberately spent time in building deep capabilities in food, technology, and operations. With this additional funding, we now plan to rapidly scale geographically to 500+ kitchens in 15 cities. We are planning to aggressively on-board talent and build robust teams — the backbone of our organization.”
While the company has yet to release its annual financial report for FY21, it reported a 15percent increase in revenue from operations in FY20 to Rs 152.69 crore from Rs 133 crore the previous financial year. During FY20, the company’s overall expenses increased by 21 percent to Rs 189.43 crore, while its losses increased by 35 percent to Rs 35.43 crore.
EatClub competes directly with Rebel Foods, FreshMenu, and a number of independent cloud kitchen brands. Although FreshMenu has been unable to secure a new round, Rebel Foods recently turned a unicorn after raising $175 million.
The food services industry is a $65 billion opportunity in India, with a CAGR of 95 percent expected to reach $110 billion by 2025. Online food delivery represents only $4.2 billion of the $65 billion opportunities. However, only 9 percent of Indian internet users are currently ordering food online, compared to 36 percent in the US and 50percent in China.
Zomato, the publicly traded food tech company, introduced Zomato Wings, this week, a platform that connects investors with restaurants. According to its CEO Deepinder Goyal’s blog post, only 25 restaurants, and cloud kitchens in India have received a Series A or larger equity fundraising round in the last three years.