Wanna get our awesome news?

Subscribe to our newsletter!


Actually we won’t spam you and keep your personal data secure

As the voice of the Indian restaurant industry, we represent the interests of 500000+ restaurants & an industry valued @ USD 4 billion. Whether a chain or independent restaurant, the NRAI is here to help every step of the way. Join us!


How food-tech start-ups are faring, in five numbers


Food start-ups aren’t the flavour of the season. They haven’t been, for quite a while now.

Last year, investors pumped in millions of dollars into various food-technology start-ups betting on consumers’ changing habits to drive growth for these companies.

However, too many start-ups jostling for market share in this segment has prompted investors to be cautious and this hyper-funded sector has been among the worst hit by the slowdown in venture funding, having seen major shake-ups in the past year.

TinyOwl Technology Pvt. Ltd, one of the most well-funded start-ups, for instance, merged with logistics company and logistics firm RoadRunnr (Carthero Technologies Pvt. Ltd) in May to start a new entity called Runnr to stay afloat.

Internet-first kitchen Spoonjoy (Emvito Technologies Pvt. Ltd) and restaurant aggregator Dazo, which had marquee investors Amazon India chief Amit Agarwal, Google India chief Rajan Anandan and Flipkart co-founders Sachin Bansal and Binny Bansal, shut shop in October after failing to raise substantial funds.

In March, ride hailing service Ola (ANI Technologies Pvt. Ltd) also shut down its food delivery business Ola Café, a year after launching it in Delhi, Mumbai, Bangalore and Hyderabad.

With Foodpanda, another well-funded food start-up, struggling (it fired 500 people in December), now the fight for dominance in food-delivery in India is between Swiggy (run by Bundl Technologies Pvt. Ltd) and Zomato (run by Zomato Media Pvt. Ltd), which is the highest venture-funded food company in India.

FreshMenu (Food Vista India Pvt. Ltd), which operates on a differentiated full-stack internet-first “cloud” kitchen model, where it both makes and delivers food, is another company that has been able to scale, primarily because with such a model, it can control the quality of its products and keep costs down.

There are at least 179 food ordering and delivery start-ups in the country, according to Tracxn, of which about 60 have raised funding. Cash-burn is a necessary component of the food-delivery business in India—experts estimate the average order value in India to be Rs.300, where delivery companies charge clients a commission of 10-20% of the order value and end up losing money on every delivery that costs upwards of Rs.50.

Given this, it is anyone’s guess what the state of the rest of the food start-ups in India, which haven’t raised funding or have been struggling to raise fresh funding in the last year, is.

We analysed data gathered by start-up tracker Tracxn and present five numbers that tell you the state of the food start-up sector.

$297 million: Amount of money invested in food-tech in 2015 and 2016, compared to $124 million invested in total, until 2014.

60: Total number of food-related start-ups that have been funded in 2015 and 2016.

44: Number of start-ups that make food, or aggregate restaurants for delivery as on 20 June.

8: Number of start-ups that have shut down in 2015 and 2016.

20: Number of start-ups that operate in only one city, or parts of one as on 20 June.


Source: LiveMint

Recommended for you