Gurugram-based hospitality chain OYO Hotels and Homes is reportedly in talks to acquire Bengaluru-based cloud kitchen startup FreshMenu in a deal worth $50 Mn-$60 Mn (INR 356 Cr-427 Cr).
Citing sources, an ET report said that the deal will help OYO standardise its food experience across all its hotels. They also added that the company has been working on this initiative for over a year. The deal will also help OYO increase its margins.
Last week OYO raised $100 Mn (INR 712 Cr) from China’s ride-hailing company Didi Chuxing, bringing it’s $1 Bn (INR 7,121 Cr) financing round to a close.
Bullish on expanding its services across international markets and strengthening its footprint in India, the company is now looking to boost its food and beverage services to increase its revenue and profit.
FreshMenu was founded in 2014 by Rashmi Daga. The startup provides a meal kit delivery service from its 35 cloud kitchens across Bengaluru, Mumbai, and Delhi NCR. It claims to receive 13K orders every day with an average order value of $5 (INR 325) as of January 2019.
FreshMenu was earlier in talks with many companies such as Swiggy, Ola, Eat.fit, Zomato and Faasos for acquisition. However, according to the sources, the talks did not finalise due to a mismatch in pricing expectations.
In January, the startup, owned by Foodvista India Pvt Ltd, raised $1.64 Mn (INR 11.7 Cr) in a Series B1 funding round from US-based venture capital firm Lightspeed Ventures and its Indian unit Lightspeed India Partners. Lightspeed India Partners is a common investor for both OYO and FreshMenu.
For the financial year ending March 2018, the startup increased its revenues by 62%.
According to a TechSci Research report, the foodtech market in India is projected to grow at a CAGR of over 12% during 2016 – 2021.
Last year, Ola-owned Foodpanda had acquired Mumbai-based food-tech platform Holachef to expand its cloud kitchen network.
The Bengaluru-based cab hailing giant had acquired Foodpanda India from Germany based Delivery Hero Group to mark its foray into the foodtech segment.
Most recently, online payment giant Paytm partnered with food delivery company Zomato to take food orders using its payment app from across the country, especially focussing on Tier 2 and Tier 3 cities.