The food tech category may be facing a lot of heat but there are startups in this space who are still able to convince investors to pump in the money.
Gurgaon based Twigly, a food-tech startup that delivers meals from its centralised kitchen, has raised $200,000 in angel funding from SAIF Partners’ Mukul Singhal, InMobi’s Amit Gupta and other investors.
Delhivery co-founder Sahil Barua, Anzy Careers’ Deepak Singh and TracxnLabs also participated in this funding round.
Mint reported the development first.
The development comes barely a couple of days after TinyOwl Technology Pvt Ltd, which recently sacked about 100 staffers as part of a restructuring exercise, raised $7.5 million (Rs 50 crore) in fresh funding from existing investors Sequoia Capital and Matrix Partners.
Queries sent by Techcircle.in to Twigly in this regard went unanswered at the time of filing this report.
The company, which went live on September 16 both as a consumer website and mobile app, was founded by Sonal Minhas, who was earlier vice-president at SAIF Partners.
The food-tech sector includes a variety of aggregators, food-ordering platforms, delivery-only players, proprietary meal sellers and cloud kitchens.
Twigly’s centralised kitchen delivers organic fast food that includes sandwiches, pasta, hummus, falafel, etc.
The menu is limited and curated regularly. Chefs are recruited after a live demonstration of their culinary skills, where Twigly offers complete access to its kitchen to the potential candidates.
Twigly says the startup’s differentiator is its high ticket size and cost management skills, in line with US based food startup Sprig’s business model. Food, as a category, has a 50-60 per cent margin and companies should not be losing money in this business, Minhas told Mint.
The company claims it ships close to 40 orders a day with an average ticket size of Rs 500. The company’s 600-square-feet kitchen in Gurgaon’s Sector 26 has the capacity to address 120-150 orders per day.
Twigly plans to add another kitchen with a capacity to process 400 orders per day and will soon offer its services in Delhi, according to Minhas.
The online food ordering business in India is estimated to be worth Rs 5,000-6,000 crore, growing at about 30 per cent month-on-month, according to a report by India Brand Equity Foundation. However, this space is transaction driven and margins can be wafer-thin for food tech companies.
The sector is also beginning to see strategic investments and consolidation.
A couple of days ago, a leaked e-mail from Zomato’s founder CEO indicated that the company might fail to meet its sales target for the financial year. The e-mail had come a fortnight after the restaurant listing and services company sacked about 300 employees globally.
TapCibo Online Solutions Pvt Ltd, which operated under the brand Dazo, closed operations earlier this month.
Cash-strapped SpoonJoy, backed by Flipkart co-founder Sachin Bansal, shut shop in Delhi and parts of Bangalore. Recently, the Spoonjoy team was inducted by hyper-local grocery and fresh food delivery startup Grofers as part of an acqui-hire deal.
Foodpanda is revoking over 500 restaurants every month as it deals with allegations of operational irregularities.
Yet, the sector continues to sustain investor interest. Recently, Techcircle.in reported that MealHopper secured $100,000 in seed funding from ixigo.com co-founders Alok Bajpai and Rajnish Kumar. Earlier, gourmet meals portal iChef.in raised an undisclosed amount from Springboard Ventures, an investment arm of media house Times Group’s holding company Bennett, Coleman & Co Ltd.
On-demand meal service startup Frsh.com recently raised under $1 million in a bridge round of funding from Mumbai Angels, Roposo co-founder Mayank Bhangdia and existing investor Kae Capital.