Curefit, an Indian startup that operates various businesses ranging from fitness centers to cloud kitchens, is seeing Ankit Nagori, one of its co-founders, swapping his shares at the firm to gain a majority stake in its food subsidiary CureFoods, which operates Eat.Fit, the cloud kitchen brand, local media The Economic Times reported, citing sources.
Regulatory filings show that Nagori holds about a 7.6% stake, which is worth around USD 56.8 million, in Curefit prior to the deal.
After the equity swap, Nagori is expected to hold “a 60-80% stake in CureFoods, with the rest owned by Curefit,” according to the same ET story.
The deal comes on the heels of Bengaluru-based Curefit’s recent spinoff of Eat.Fit as an independent entity earlier this month. This has led to speculations that Nagori is looking to exit Curefit the company he co-founded in 2016, local tech media Entrackr wrote, citing three sources in the know.
Curefit has rebutted the rumor of Nagori completely exiting the company.
“Ankit Nagori is not exiting Curefit. He will continue to be on the board of Curefit and will also have a stake in Curefit and will work with Mukesh Bansal on strategic matters,” the company said in an email statement in response to the Entrackr story. Bansal is the co-founder of Curefit.
Nagori will remain on the board of Curefit while after the equity swap, he will be sharpening his focus on reigning over Eat.Fit.
The earlier spinoff will also enable Eat.Fit for independent fundraising. As of now, it still has a three-year runway through CureFoods after the spinoff, but Curefit aims to “make CureFoods profitable in the next 18-24 months.”
This year has been a challenging one for Eat.Fit as the pandemic has dealt a huge blow to the nascent cloud kitchen sector across India. Its order volume dropped by over 80% during a pandemic-induced two-month long nationwide lockdown.
In May, food delivery major Swiggy said it’s shutting down non-performing business arms in an effort to reduce cost and survive during the lockdown. Sriharsha Majety, co-founder of Swiggy, in an email to his employees, wrote, “The biggest impact here is on the cloud kitchens business…Since the onset of Covid, we have already begun the process of scaling down our kitchen facilities temporarily or permanently, depending on their outlook and profitability profile.”
Eat.Fit has slashed its over 60 kitchens to 12 or so and contracted its business geographically, with kitchens operational only in Bengaluru, Hyderabad, and Coimbatore. The contraction has also resulted in a 70% staff layoff, per previous media reports.