Ankit Nagori-led Curefoods aims to expand cloud kitchens across India

Curefoods is expecting to reach annual recurring revenue (ARR) of Rs 1000 crore ($122 million) by the end of this year and it aims to be ready for an IPO in 18 months

Ankit Nagori, the former Flipkart executive and co-founder of India's largest gym chain, Cult.fit, is betting big on expanding the network of cloud kitchens across the country through his new venture Curefoods.

Curefoods which commenced operations in 2020 said it is now the second-largest cloud kitchen player in India in terms of footprint with the largest manufacturing capability in the fresh food space. A 'cloud kitchen' is one that does not offer a dine-in facility and accepts food orders only through an online ordering system

In 2023, the firm aims to open 50 kitchens in about 7-8 cities. It is targeting to expand in 50 cities in the next 5 years and maintain its profitability. It plans to hire about 500 more people to strengthen its workforce this year.

“We are moving towards profitability very fast and will turn profitable in by June this year,” said Ankit Nagori, founder of Curefoods, in an interview. “We will be ready to go public in two years.”

Curefoods said it has over 150 cloud kitchens across 15 cities in India. It manages about 40,000 orders a day. The aim is to manage 75,000 orders a day by the end of 2023. The firm crossed about 1.1 million orders a month last year in December.

Nagori said the company is at an annual recurring revenue (ARR) of $63 million. He said the company is expecting to reach Rs 1,000 crore ARR by the end of this year.

When asked about plans to raise a new round of funding, Nagori said the company is well-funded with $110 million in equity and $20 million in debt. It is backed by investors such as Iron Pillar, Chiratae Ventures, Sixteenth Street Capital, Accel Partners and Flipkart co-founder Binny Bansal.

The company competes with players such as Rebel Foods, Biryani By Kilo, Box8, and FreshMenu.

The firm has five manufacturing units in Delhi, Mumbai, Bengaluru, Chennai, and Pune. From these locations, it supplies almost 70 per cent of its finished products to its cloud kitchens.

About 70 per cent of its orders are fulfilled by Zomato and Swiggy. The rest are provided through its own delivery network. It expects its own network to be about 40 per cent by the end of 2024.

Categories such as desserts, pizza, and biryani contribute to most of its business. Curefoods houses brands like EatFit, CakeZone, Nomad Pizza, Great Indian Khichdi, Sharief Bhai and Iceberg Ice creams.

EatFit manages 450,000 orders a month and Cakezone manages 250,000 orders a month. These online-only brands are expected to become very large brands and the company hopes to grow 4-5 times in the next five years.

When asked about the impact of the uncertain economic environment on the cloud kitchen segment, Nagori said that the category wouldn’t have much impact due to the slowdown as the demand for food at home as well as outside is huge. But he said there is a decrease in discretionary spending. Some of the factors include the slowdown in the growth rate of the overall industry slows, job losses and issues related to profitability.

“For us, it means that we also need to be super careful about how we market our products,” said Nagori. “We also don't want to do a lot of experiments and rather focus on what's already working for us.”

The food delivery market will triple over the next five years according to the experts. It will reach 8-9 million orders a day from the current three million figure.