Rebel Foods, which runs an extensive network of dark kitchens in approximately a dozen markets, is the latest Indian startup to achieve unicorn status. The Indian startup spoke on Thursday it has raised $175 million in its Series F investment round that valued it at $1.4 billion, up from around $800 million last year. Qatar Investment Authority, sovereign wealth fund of the State of Qatar, led the financing round with participation from existing investors Coatue and Evolvence. Rebel Foods also counts Sequoia Capital India and Goldman Sachs among its investors.
Rebel Foods is the 31st Indian startup to become a unicorn this year as scores of high-profile investors, including Tiger Global, SoftBank, Sequoia, Temasek aggressively double down on their chances to back growing firms in the world’s second-largest internet market. (And many more are starting to explore India. A16z made its first funding in an Indian startup this week.)
Rebel Foods turns the world’s most significant number of what it describes as “internet restaurants” in 10 countries. Over 45 brands, many of which Rebel Foods owns and also several from firms such as Wendy’s and Mad Over Donuts, cook food particularly for delivery rather than serving dine-in or takeaway customers. The startup says it helps serving over 4,000 of these internet restaurants.
The idea after dark kitchens — also identified as ghost and cloud kitchens — is to make food serving operations more economical. Setting up and running a restaurant is expensive as they are also, after all, pieces of real estate.
Setting up cloud kitchens enables partner restaurants and brands to move away from expensive retail locations and streamlines the market by just producing food.
“The big disruption that the cloud kitchen model brought about is that you don’t have to put up five real estates to run five different restaurants,” shared Jaydeep Barman, founder and chief executive of Rebel Foods, in a virtual conference earlier this year. As carmakers produce dozens of models from one factory, “using technology, supply chain and workflows, you can actually have one kitchen for five restaurants,” he described.
Many investors tell that the cloud kitchen model is also crucial for food delivery brands, restaurants, and companies to approach the larger market. In many emerging markets, including India, the ticket size for a lunch or dinner order is $3 to $5, making the current business models unviable for companies to profit.