Monday, April 11, 2016

Food Startup Flips Business Model To Cut Down Costs, Maintain Growth.

This is a case sort of belt-tightening across different startups sectors that cut across e-commerce to food-tech companies. Faasos - one of the most highly-funded food startups, which so far retailed only self-branded food from its own kitchens - around 175 odd ones across top 15 cities - is the latest one to flip strategies to keep costs down while maintaining the pace of growth. 

The company flipped its business model last year to enlarge food variety on its menu by tying up home chefs - around 100 on its rolls now.

The model had limitations, though. Food from home-chefs can get high-on-demand but home chefs do not have the ability to address the consistent point in order volumes. "We will be using the strength of home-chefs for bulk party orders that we started on with about a month ago," said Revant
Bhate, Head of Marketing at Faasos.

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Faasos which handles around 12,000 orders a day is now hooking on to restaurants and independent caterers to sell their best selling products to customers, in a bid to further expand its menu without bearing the cost of setting up kitchens.

"At the end of the day, it does not matter to the customer where the food is coming from," said Bhate. At present, the Faasos menu has broadly 7 to 8 segments -north Indian, biryani, signature rice, curries, wraps, pizzas, desserts, chai and snacks and all-day breakfast.

Restaurant tie-ups are aimed at getting into other cuisines such as Chinese, salads, pastas, continental and south Indian dishes. The move will help Faasos which recently completed tie-ups with 500 restaurants across metros and tier 1 cities to double up order volumes without investing big on new customer acquisition. "The idea is to move up from 3 orders a month per customer to 6 orders from the same set of customers," said Bhate who hopes to close fiscal year March 2016 with revenues somewhere close to Rs.100 crores which was the set target for the company.

The company founded in 2011 by two friends Jaydeep Barman and Kallol Banerjee counts leading venture capital firm Sequoia Capital as its early investor and had last year raised two rounds of funding -$20 million led by Lightbox Ventures and $30 million led by Russian firm ruNet which valued the firm at around $130 million.
Disclaimer: - Following article come from ET

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