The deal reportedly took place in a share swap agreement, with Kitchens Centre’s prior investors also getting equity in the merged entity: Report
The move will make the combined entity as the biggest player in the space with more than 1,000 cloud kitchens spread across 20 cities
The merger will enable the combined entity to rapidly scale up and increase its presence across the country
In a big development, cloud kitchen startup, [email protected] , has merged with Delhi-based Kitchens Centre. The move will make the combined entity the biggest player in the space with more than 1,000 cloud kitchens spread across 20 cities. The merger will enable it to rapidly scale up and increase its presence across the country. The move will also help the two startups to leverage each other’s strong supply chain links to complement its operations. [email protected] chairman and founder, Junaiz Kizhakkayil, said, “We have aggressive plans to expand rapidly across India. We found Kitchens Centre to be a good partner in terms of vision, expertise and shared values in the team. We are excited and confident that this union will help us scale up rapidly and bring unparalleled solutions to our existing and prospective clients.”
Kitchens Centre CEO and founder, Lakshay Jain, said, “ [email protected] is a leader in the cloud kitchen space with their strength in culinary operations and technology expertise. Combining that with our strength in cloud kitchen infrastructure and supply chain makes the entity a formidable force. We look forward to growing together and being the top enabler for the food and beverage industry.”
With this merger, the combined entity will service over 150 brands across the length and breadth of the country. Founded in 2018 by Kizhakkayil, Bengaluru-based [email protected] currently has more than 350 kitchens across 12 hubs. The startup began operations with an initial seed capital from Zomato and then later bought back the shares from the delivery giant in 2019. [email protected] is currently operated and owned by Loyal Hospitality. It had raised $16.2 Mn in its series B funding round in February of 2020. Later that year in May, the startup raised another $2.6 Mn in venture debt from Trifecta Capital. [email protected] counts Dominos, Subway, Taco Bell and Nando’s as its top clients. On the other hand, Kitchens Centre was founded in 2019 by Lakshay Jain. The Delhi-based cloud kitchen chain operates 700 kitchens across 90 locations in 20 Indian cities. It also works with a slew of popular restaurant chains including Mainland China, Wow Momo, Barbeque Nation, among others. The startup is owned and operated by Cloud Retail Solutions. It received an undisclosed sum in its Pre-Series A in November of 2020. Interestingly, the Kitchens Centre is backed by big names including U.S-based early stage venture firm Village Global. The VC firm counts billionaires including Bill Gates, Jeff Bezos, Eric Schmidt and Mark Zuckerberg as its benefactors. The startup competes with giants Zomato and Swiggy, as well as other major players such as Rebel Foods, Curefoods, Food Darzee and Box8. According to a report by RedSeer consulting, the Indian cloud kitchen market is expected to soar to $2-3 Bn mark, in terms of a Gross Merchandise value (GMV), by 2025. This is a sharp rise compared to the earlier $400 Mn GMV back in 2019. The growth has been fueled by urbanisation, higher disposable income and better supply of new restaurants coupled with a hyperlocal delivery model. This comes barely days after cloud kitchen aggregator, Curefoods, acquired exclusive franchise rights for pizza brand Sbarro, in South India. This was followed by ANI Technologies, mobility giant Ola’s parent company, completing its acquisition of once popular food delivery aggregator, foodpanda, from Germany-based Delivery Hero. In January this year, Ankit Nagori-led Curefoods also acquired Accel-backed Maverix Platforms for an undisclosed amount. The sector is witnessing a major consolidation even though revenues are rising. With funding galore for specific startups, the foodtech sector seems to have benefited the most from urbanisation. But, it’s to see how the sector will evolve. Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

Kitchens@ Merges With Kitchens Centre To Be India’s Biggest Cloud Kitchen Player

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The acquisition will help Bengaluru-based Kitchens@ expand its presence pan-India. The estimated revenue of the combined entity in the first quarter is expected to be $30 million in recurring revenue terms, Junaiz Kizhakkayil, Founder, Kitchens@, said. 0 CLAPS
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﻿DG Ventures﻿ and ﻿BEENEXT﻿ backed cloud kitchen company Kitchens@ has acquired Delhi-headquartered ﻿Kitchens Centre﻿ in a share swap agreement. Investors in Kitchens Centre , including Village Global and AngelList India, will be given equity in the merged entity under the Kitchens@ brand, said a senior executive. The acquisition will provide Kitchens@ with a pan-India presence, and the estimated revenue of the combined entity in the first quarter is expected to be $30 million in recurring revenue terms, Junaiz Kizhakkayil, Founder and Chairman, Kitchens@, told YourStory. The cloud kitchen company did not disclose the size of the deal, though it confirmed neither the founders nor investors in Kitchens Centre had taken secondary exit as part of the deal. Founded in 2018 by Junaiz, Kitchens@ has a presence across 12 hubs with over 350 kitchens in Bengaluru. It works with brands such as Dominos, Subway, ITC, Mainland China, Barbeque Nation, and others. Set up with initial seed capital from ﻿Zomato﻿, Kitchens@ bought back the shares from the foodtech major in 2019, said Junaiz, who previously worked with the Empire chain of restaurants in Bengaluru for 26 years. Junaiz Kizhakkayil, Founder and Chairman, Kitchens@
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Gurugram-headquartered Zomato had also started its infrastructure-led cloud kitchen business Zomato Infrastructure Services in 2016, which later shut down in 2018. Rival Swiggy also saw its cloud kitchen business suffer due to the COVID-19 pandemic, with contractual staff getting laid off in 2020. Kitchens@ continues to work with aggregators such as Swiggy, Zomato, and Amazon Foods for demand generation and logistics while it focuses on the supply chain and culinary operations. “The acquisition will help us expand to cities outside of Bengaluru. Also we plan on pivoting the model of Kitchens Centre from a brand operated kitchen to a culinary operations kitchen model, which has better margins for the business. Going ahead, we will move from an equal distribution of the two to an 80-20 mix,” Junaiz told YourStory. Started in 2019 by Lakshay Jain, ﻿Kitchens Centre﻿ is present across 20 cities at 90 locations and operates 700 kitchens. The company works with restaurant partners, including Mainland China, Wow Momo, Barbeque Nation, Biryani Blues, and others. Junaiz added, using Kitchens Centre’s network, the combined entity will be able to target new cities with a single hub and increase supply density around an area. While the first six months of the pandemic affected Kitchens@'s business adversely, the company has seen its GMV grow nearly 10X in 2021 from the base year of 2019. Gross Merchandise Value (GMV) denotes the total value of sales over a stipulated period. Stay Updated

BEENEXT-backed cloud kitchen operator Kitchens@ acquires Kitchens Centre

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Trifecta Capital-funded shared cooking platform Kitchens@ on Wednesday merged with cloud kitchen firm Kitchens Centre, making it the biggest player with 1,000 kitchens in over 20 cities. ADVERTISEMENT
Kitchens@ said currently it has over 350 kitchens across 12 hubs, covering the entire Bengaluru city. The platform has Dominos, Subway, Taco Bell and Nando’s, Chicking as top customers. Kitchens Centre, on the other hand, is eyeing to raise its locations from 45 to 50, which means it will then have 700 kitchens spread in 20 cities. It has existing customers as Mainland China, Wow Momo, Barbeque Nation, Chayoos, Biryani Blues. ADVERTISEMENT
“We have aggressive plans to expand rapidly across India. We found Kitchens Centre to be a good partner in terms of vision, expertise and shared values in the team. We are excited and confident that this union will help us scale up rapidly and bring unparalleled solutions to our existing and prospective clients,” said Junaiz Kizhakkayil, Founder and Chairman at Kitchens@. “Kitchens@ is a leader in the cloud kitchen space with their strength in culinary operations and technology expertise. Combining that with our strength in cloud kitchen infrastructure and supply chain makes the entity a formidable force. We look forward to growing together and being the top enabler for the food and beverage industry,” said Lakshay Jain, Founder and CEO at Kitchens Centre. With this merger, the combined entity will be enabling over 150 brands in the country. Kitchens@, which is operated and owed by Loyal Hospitality, had raised $16.2 million (Rs 115 crore) in its series B round of funding in February 2020. In May that year, the company went ahead to raise Rs 20 crore ($2.6 million) in venture debt from Trifecta Capital. Kitchens Centre, which is owned and operated by Cloud Retail Solutions Pvt. Ltd., received an undisclosed sum as part of its pre-series A round of funding in November 2020 from US-based early-stage venture firm Village Global along with billionaires Bill Gates, Jeff Bezos, Eric Schmidt and Mark Zuckerberg. ADVERTISEMENT

VC-backed shared cooking platform Kitchens@ merges with Kitchens Centre

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The acquisition will help Bengaluru-based Kitchens@ expand its presence pan-India. The estimated revenue of the combined entity in the first quarter is expected to be $30 million in recurring revenue terms, Junaiz Kizhakkayil, Founder, Kitchens@, said. 3 CLAPS
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﻿DG Ventures﻿ and ﻿BEENEXT﻿ backed cloud kitchen company Kitchens@ has acquired Delhi-headquartered ﻿Kitchens Centre﻿ in a share swap agreement. Investors in Kitchens Centre , including Village Global and AngelList India, will be given equity in the merged entity under the Kitchens@ brand, said a senior executive. The acquisition will provide Kitchens@ with a pan-India presence, and the estimated revenue of the combined entity in the first quarter is expected to be $30 million in recurring revenue terms, Junaiz Kizhakkayil, Founder and Chairman, Kitchens@, told YourStory. The cloud kitchen company did not disclose the size of the deal, though it confirmed neither the founders nor investors in Kitchens Centre had taken secondary exit as part of the deal. Founded in 2018 by Junaiz, Kitchens@ has a presence across 12 hubs with over 350 kitchens in Bengaluru. It works with brands such as Dominos, Subway, ITC, Mainland China, Barbeque Nation, and others. Set up with initial seed capital from ﻿Zomato﻿, Kitchens@ bought back the shares from the foodtech major in 2019, said Junaiz, who previously worked with the Empire chain of restaurants in Bengaluru for 26 years. Junaiz Kizhakkayil, Founder and Chairman, Kitchens@
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Gurugram-headquartered Zomato had also started its infrastructure-led cloud kitchen business Zomato Infrastructure Services in 2016, which later shut down in 2018. Rival Swiggy also saw its cloud kitchen business suffer due to the COVID-19 pandemic, with contractual staff getting laid off in 2020. Kitchens@ continues to work with aggregators such as Swiggy, Zomato, and Amazon Foods for demand generation and logistics while it focuses on the supply chain and culinary operations. “The acquisition will help us expand to cities outside of Bengaluru. Also we plan on pivoting the model of Kitchens Centre from a brand operated kitchen to a culinary operations kitchen model, which has better margins for the business. Going ahead, we will move from an equal distribution of the two to an 80-20 mix,” Junaiz told YourStory. Started in 2019 by Lakshay Jain, ﻿Kitchens Centre﻿ is present across 20 cities at 90 locations and operates 700 kitchens. The company works with restaurant partners, including Mainland China, Wow Momo, Barbeque Nation, Biryani Blues, and others. Junaiz added, using Kitchens Centre’s network, the combined entity will be able to target new cities with a single hub and increase supply density around an area. While the first six months of the pandemic affected Kitchens@'s business adversely, the company has seen its GMV grow nearly 10X in 2021 from the base year of 2019. Gross Merchandise Value (GMV) denotes the total value of sales over a stipulated period. Stay Updated

Augustine Kurian and his business partners never gave food delivery a second thought. Diners walked into their restaurant—Kappa Chaka Kandhari in Chennai and Bangalore—for the unique gastronomical experience they had to offer. But the March 2020 lockdown changed it all. As restaurants shuttered and Indians turned to food delivery apps, restaurant owners were forced to go back to the drawing board and reevaluate their approach. Kurian initially curated a delivery-only menu in April from their dine-in offering, but as months passed, the team decided to launch a separate, full-fledged virtual brand, DumBir, to deliver a variety of Biryanis starting December. “The pandemic and the lockdown made us look at this opportunity that always existed but we never thought of,” says Kurian, who currently runs one such outlet for delivery and plans to launch eight more soon. They are also exploring more brands to launch. Prior to the pandemic, most restaurants that were on food delivery apps had the same menu on offer for both dine-in and delivery. And then there were a host of cloud kitchens with their delivery-only options. But the pandemic has now led to restaurants, big brands, conglomerates and local chefs launching virtual food brands solely for delivery purposes as a new and unexpected opportunity opened up. In the last six to eight months, hundreds of new delivery-only food brands have started to populate food delivery apps Swiggy and Zomato alongside several of them also having direct ordering channels for customers. Experts estimate that at least 20% of the new onboarded brands on food delivery apps are now virtual brands. The reasons for this are simple, explains Divya Prabhakar who runs a restaurant called Bengaluru Oota Company and is in the midst of launching a delivery-only brand for southern regional cuisine. “All restaurants were impacted during Covid, so you want to work in a space that’s not very volatile,” says Prabhakar. “The economics of running a cloud kitchen are very different — overheads with restaurants are so high which isn’t the case with virtual kitchens. And with people’s dining habits changing, you’d want to change along with it.”
Unlike the U.S. , where the pandemic-induced acceleration of virtual brands was to use up the idle kitchen space, experts say, in India it’s more about aligning with changing consumer habits coupled with the fact that it’s economically more viable to launch a new food brand which is delivery-only rather than a full-fledged restaurant with high rents and long lock-in periods. In India, many of these virtual brands are being launched using new cloud kitchen spaces — an industry that is expected to become worth $2 billion by 2024, per RedSeer Management Consulting, up from $400 million in 2019. Startups offering a plug-and-play model of cloud kitchens are catering to this growing need. Delhi-based Kitchens Centre, launched almost two years ago, helps new and existing food brands with a ready-to-move-in cloud kitchen with the necessary infrastructure and technology — Shopify for the food services industry, so to say. In the last six months, Kitchens Centre has been approached by hospitality industry people from all stripes, enquiring about how they could get into the business of delivering food. These include conglomerates such as the ITC which launched in-house brands such as ITC Pulao for their pulao and biryani collection, and also top hospitality companies such as Massive Restaurants, Azure Hospitality, Speciality Restaurants and BBQ Nation ramping up their cloud kitchen presence across cities with both — their anchor and new ancillary brands. “Conversations about launching cloud kitchens with Speciality were on for almost a year, but in April their plans accelerated” recalls Lakshay Jain, founder and CEO of Kitchens Centre. “We have also been approached by restaurants and food courts asking us to take over some of the unused kitchen space.” Jain further says they have almost doubled their occupancy from 160 kitchens to 300 kitchens in the last few months and have onboarded close to 200 virtual listings. Experts in the food tech space say that while the concept of cloud kitchens has existed in the country for several years now, brands that didn’t exist in the restaurant ecosystem at all have cropped up as a result of the lockdowns. And the trend is here to stay — especially since restaurants provide 12% margins as opposed to cloud kitchens that offer margins as high as 18%, says foodtech analyst Abhijit Routray. As for restaurants wanting to launch new brands for different cuisines, it’s about brand perception. “This trend will sustain for a long time,” says Routray, an engagement manager at RedSeer Consulting. “Restaurants want to have a house of brands instead of squeezing different kinds of food under the same brand because they want to have different cuisines targeting different consumers at different price points.”

The rise of virtual food brands in India

Kitchens Centre

Acquired

Kitchens Centre claims to provide ready-to-move-in, fully equipped, and compliant kitchens.On March 2nd, 2022, Kitchens Centre was acquired by Kitchens@. Terms of the transaction were not disclosed.

Name	Utsav Somani
Firm
Work History	Lead, Delhi Chapter, LetsVenture
Other Seats	Kitchens Centre

Name	Lakshay Jain
Work History
Title	Founder, Chief Executive Officer
Status	Current

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