Mumbai-based foodtech startup Box8 has raised $15 Mn in its Series C funding round, led by eWTP Ecosystem Fund. The company’s existing investors Mayfield and IIFL Seed Ventures fund will also participate in this round. The company said it plans to scale its business geographically to five more cities with 100 more kitchens in the next 12 months. They are also planning to invest the new funds in talent and technology.
Commenting on the fund, Anshul Gupta cofounder of Box8 told Inc42, “We are solving two big problems: on-demand preparation of high-quality food and delivering it piping hot within 25 mins. To keep doing this at scale, we would double down on tech.”
A $6.23 Mn funding by eWTP was first reported by data platform paper.vc in its March 29 newsletter. According to a Ministry of Corporate Affairs filing accessed by Inc42, Redefine Capital Fund (eWTP Ecosystem entity) has acquired 1,603 compulsorily convertible preference shares (CCPS) in Box8 at the premium of INR 2,71,611.
The remaining contributions from existing investors will be filed soon, Amit Raj, cofounder of Box8 said.
This new funding brings Box8’s total funding amount to around $27 Mn. Other existing investors in the company are Trifecta Capital, IIFL Seed Ventures Fund, Mayfield Ventures, Indian Angel Network and three angel investors.
Box8 was founded in 2012 by two IIT graduates Amit Raj and Anshul Gupta. Box8 is a full-stack cloud kitchen startup which means that it own the entire food value chain, from procurement of high-quality ingredients to food preparation to the last mile delivery. The Mumbai-based startup claims to serve over 1 Mn meals every month across their 110 plus outlets in Mumbai, Pune, Bangalore, and Gurgaon.
“Traditional restaurants simply have a different DNA: their food is all about experience and is meant to be eaten immediately. We are a delivery first company, designing our food keeping in mind that it will be in transit for another 10-15 minutes. Our in-house fleet delivers 100% of our orders, this gives us even greater control over the food quality,” Amit added.
The Booming Foodtech Sector
According to RedSeer’s Foodtech Market Updates, the foodtech industry has seen an overall GMV growth of close to 140% in 2018, with order volumes increasing by a whopping 176%.
RedSeer’s March updates on the sector had noted an evolution of order use cases with more and more consumers using food delivery applications to order lunches, breakfasts and snacks, in addition to the usual dinner orders. This increase in the number of use cases has lead to around 25% drop in average order values in 2018. The average order values are further expected to go down to INR 250 in the next five years. However, overall this increase in use cases has lead to greater customer engagement for businesses and hence, much larger market.
In January 2019 updates, RedSeer had released a FoodTech Leadership Index (FLI) which ranked Swiggy at the top place in the sector with a total score of 96 in the fourth quarter of 2018. While Zomato came in second with a score of 82. Meanwhile smaller players UberEats and Ola’s Foodpanda came in third and fourth respectively.
Earlier this month, another cloud kitchen startup Fassos had also raised $15.9 Mn from a bunch of its existing investors in its ongoing Series D round. Also, Gurugram-based hospitality chain OYO Hotels and Homes had reportedly been in talks to acquire Bengaluru-based cloud kitchen startup FreshMenu in a deal worth $50 Mn-$60 Mn (INR 356 Cr-427 Cr).
Further, the two unicorns in the foodtech segment – Swiggy and Zomato have also been busy in raising funds and expanding their portfolio services. Recently last month, Zomato had raised $39.74 Mn in a private equity round from US-based Glade Brook Capital Partners. While its arch-rival, Swiggy raised a billion dollar funding in a Series H round led by Naspers in December 2018.