Hardeep Singh
Rebel Foods, which owns cloud kitchen brands such as Behrouz Biryani, Mandarin Oak Ovenstory Pizza, and Faasos, is the most recent company to be valued at $1 billion. In the following 18 to 24 months, the firm plans to go public through an initial public offering (IPO).
The firm is now valued at $1.4 billion after raising $175 million in a round sponsored by Qatar Investment Authority, a sovereign wealth fund. Rebel Food’s series F fundraising round also included Coatue and Evolvence.
Unlike the last wave, which forced Rebel to close 70 per cent of its kitchens for a few months in 2020, revenue is increasing this time because consumers are more comfortable ordering meals online, and state governments recognise it as an essential service.
Rebel owns and operates over a dozen virtual restaurant brands, which it distributes via its own app and third-party platforms such as Zomato and Swiggy. The fresh financing comes less than six months after the Mumbai-based firm received $125 million as part of a $525 million fundraising round.
The additional funds, according to the company’s fund-raising statement, would be used to expand the company’s global reach, strengthen its technical stack, and add new brands to its portfolio. Rebel’s foray into physical distribution isn’t very novel. Prior to implementing the cloud kitchen idea in 2014, the company was a single-brand QSR chain known as Faasos. However, market dynamics have altered as a result of the introduction of meal ordering apps, which offer consumers both convenience and variety.
Rebel Foods was created a decade ago by Jaydeep Barman and Kallol Banerjee. The company’s first endeavour was Fasoos, a network of quick-service restaurants (QSRs) specialising in kebab rolls.
The firm has opened in 20 Tier-2 cities, all of which have experienced rapid growth. While demand is increasing in Mumbai and Delhi-NCR, it is not as strong in Bengaluru, as many software experts have returned to their hometowns.
In 2016, the firm switched to the concept of a cloud kitchen. A cloud kitchen, sometimes known as a ghost kitchen, is a commercial kitchen focused on meal delivery. These kitchens have no physical location. Faasos, a chain of quick-service restaurants (QSRs) that served kebab rolls and had an online ordering option, was founded by Jaydeep Barman and Kallol Banerjee. A reassessment of the company’s approach was spurred by a combination of expensive rentals and the fact that the bulk of their purchases were done via the internet. They closed their stores in 2016 and switched to a cloud-kitchen-only company, offering a variety of cuisines prepared by cooks working in low-cost facilities.
Apart from its own apps, it is currently one of the most successful online restaurant companies, with over a dozen brands selling biryani, Chinese, pizza, wraps, and desserts via meal delivery platforms such as Zomato and Swiggy. In its most recent round of funding in 2020, it was valued at more than $800 million, with investors including Sequoia Capital India, Lightbox Ventures, Coatue, Goldman Sachs, Gojek, and Uber founder Travis Kalanick.
Rebel Foods presently manages 45 cloud kitchens that supply anything from Chinese to Indian to sweets via delivery platforms such as Zomato and Swiggy. They have their own delivery app as well.
According to the Mumbai-based corporation, the funds will be used to extend the company’s global reach, enhance technology, and add new brands to its portfolio. The firm now runs 450 cloud kitchens in ten countries, including Indonesia, the United Arab Emirates, and the United Kingdom.
Rebel Foods is the first unicorn business to emerge from a cloud kitchen. Swiggy and Zomato have expressed interest in entering these areas as well, albeit little progress has been made thus far.
Because it eliminates customer-facing expenses like paying servers, getting larger space for dine-in, electricity bills, and other charges, running a cloud kitchen is a more cost-effective choice than running a typical restaurant.
It also plans to expand its geographic coverage to include Saudi Arabia, Qatar, and Bahrain, in addition to India, the United Kingdom, the United Arab Emirates, and Indonesia. In the last two months, it has opened kitchens in Malaysia, Singapore, and Bangladesh. Rebel is making its cloud kitchen platform available to third-party firms such as Wendy’s, Naturals ice cream, and Anand Sweets, in addition to its own facilities.
They seek to bridge the gap between single-serve and group-serve options, as well as value and beauty. We intend to launch a high-end dining service as well as an Indian curries brand. According to the bus, Wendy’s will build 300 additional kitchens before the end of 2022.
Travis Kalanick founded City Storage Systems after leaving ride-hailing startup Lyft. The company builds kitchen infrastructure for the cloud kitchen industry. Last year, Kalanick also purchased a minor interest in Rebel. Rebel’s popularity has grown in recent years. According to the two previously stated sources, the business is projected to complete the fiscal year ending March 2020 with total sales of Rs 600-650 crore, and it is presently earning monthly revenues of Rs 75 crore. Rebel now operates over 325 cloud kitchens in India and is expanding globally, including sites in Southeast Asia, the Middle East, and Europe.
Existing investors Coatue and Evolvence have also joined the latest funding round. Faasos, Behrouz Biryani, and Mandarin Oak are among the brands in Rebel Foods’ portfolio. The Series F investment, according to Rebel Foods, drives the company to unicorn status, with a valuation of USD 1.4 billion.
