Cloud kitchen fund and incubator Ghost Kitchens has invested an undisclosed amount in the QSR Brands India and Eathos Group to help the restaurant brands scale up in several locations.
Incorporated in October 2019, Ahmedabad-based Ghost Kitchens is the first Indian fund and incubator that specifically focusses on cloud kitchens. Founded by Jayendra Vandravandas Tanna and Karan Tanna, the fund plans to partner with more than 20 cloud kitchens across 12 cities and run 300 such brands. Ghost Kitchens will also include Tier 2 and Tier 3 in its roadmap.
Ghost Kitchens will provide capital, infrastructure, backend support, marketing and administrative services to both QSR and Eathos to facilitate growth for the two companies. With Ghost Kitchens acquiring a majority stake in both brands, Eathos Group’s valuation is said to be at $2.2 Mn and QSR’s at $5.5 Mn.
Mumbai-based QSR was founded in February 2019 by Sabbir Ansari and Ishwar Konnar. Currently, it is involved with bars, restaurants and canteens, and cloud kitchens. It runs five brands including New York Waffles and Dinges, Starboy Pizzas and Shakes and Hakka Makka, along with over 130 cloud kitchens in four cities.
Meanwhile, Eathos is a Dubai-based restaurant operator that owns brands like Biryani Hazir Ho, Bolo Tara Rara and Arey O sambhar, alongside 20 cloud kitchens in 2 cities. The brand is founded by Sabbir Ansari.
The Indian food delivery market is expected to reach around $5 Bn by the end of 2023. Meanwhile, the cloud kitchen market size is expected to reach $1.05 Bn by 2023, as per DataLabs by Inc42.
DataLabs by Inc42 also estimates that the annual cost of opening a restaurant in India, on average, is approximately 3.05x times that of a cloud kitchen.
Looking at the market potential market size, a lot of players have started entering the nascent domain of cloud kitchens. Big restaurant brands, food aggregators like Zomato and Swiggy and other big names like Ola Foods have incorporated cloud kitchens on their platforms as well. Even big players like budget lodging platform OYO has been trying to enter this market.
“The unit economics of cloud kitchen businesses can only be sustainable if the overhead expenses are drastically cut down. We are creating an infrastructure that can support multiple companies to scale quickly without reinventing the wheel,” said Ghost Kitchens cofounder and CEO Karan Tanna.
Some of the big names in the Indian cloud kitchen domain include Rebel Foods, FreshMenu, Box8, Eat.fit, Ola Foods among many others. According to media speculations, Uber’s cofounder Travis Kalanick was looking to invest in Rebel Foods, back in October 2019.