Box8 Bags $1.69 Mn Debt Funding From Trifecta Capital

Update: December 12, 2019 | 12: 32 PM

After the story was published, a Box8 spokesperson told Inc42 that the company has raised INR 20 Cr debt from Trifecta Capital. This is over and above the previous Series C funding.

Mumbai-based foodtech startup Box8 has raised a fresh round of debt to amp up its opportunities in the burgeoning cloud kitchen space in India.

According to the Ministry of Corporate Affairs filings accessed by Inc42, Poncho Hospitality Pvt. Ltd, parent company of Box8, has raised INR 12 Cr debt via debentures from Trifecta Capital in three equal tranches— August, October and December. The debentures have been issued at a price of INR 10 Lakh.

Further, the company filings of November show that it has allotted 44 Series C1 preference shares to Trifecta worth INR 1.19 Cr. Inc42 reached out to Box8 and Trifecta but did not receive a response till the time of publication. It is unclear if this is part of an ongoing larger debt round or whether it is limited to three tranches.

Prior to this round, Box8 has raised around $27 Mn from investors such as eWTP Ecosystem Fund, IIFL Seed Ventures Fund, Mayfield Ventures, Indian Angel Network and others.

Box8, founded in 2012 by Amit Raj and Anshul Gupta, is a full-stack cloud kitchen startup which means that it owns the entire food value chain, from procurement of high-quality ingredients to food preparation to the last mile delivery.

It claims to serve over 1 Mn meals every month across their 110 plus outlets in Mumbai, Pune, Bengaluru and Gurugram. At the time of its last fundraise in March, the company had said that it plans to scale its business geographically to five more cities with 100 more kitchens in the next 12 months.

The Cloud Kitchen Opportunity In India

In a recent cloud kitchen analysis, Datalabs by Inc42 found that while wider audience reach and last-mile fulfilment are great in the cloud kitchen-only model, it usually suffers from having no meaningful customer interactions and this impacts customer retention in cloud kitchens. The cloud kitchen market is seeing heavy inflow of interest of investors as well as larger foodtech players such as Swiggy, Zomato and others, as players such as Box8, FreshMenu, Rebel Foods etc gain traction.

The low setup cost, lower operational expenditure and rising appeal for home delivery have made the Indian cloud kitchen market very crowded, but it’s still the most affordable option for new restaurants looking at the online delivery space.

Further in terms of unit economics, another Inc42 analysis noted that the cloud kitchens are able to make 10% profit as compared to dine-in restaurants making 3% profits. Datalabs by Inc42 projects the market size of cloud kitchens to reach $1.05 Bn by 2023 in India with a growth rate of 12%. At present only 13% of the total market size has been tapped, showing a massive potential of growth for this business.