Tiger Global, which was on an Indian unicorn-minting journey and turned four more startups into billion-dollar companies just last week, has struck again with its latest investment in EatClub Brands, leading a USD 40 million in the Mumbai-based startup in a deal that marks the US mega fund’s first bet in the country’s cloud kitchen space.
With the new investment, Tiger has built up a wide-ranging portfolio in the world’s third-largest startup ecosystem this year across all the hot sectors such as stock-trading, crypto, D2C, edtech, e-grocery, credit, and digital payments.
Formerly known as BOX8, the nine-year-old startup has also rebranded itself to EatClub Brands after the recent financing from the New York-headquartered hedge fund. Founded by Amit Raj and Anshul Gupta in 2012, EatClub Brands operates eight food brands including BOX8, MOJO Pizza, and ZAZA Biryani. The startup runs over 150 cloud kitchens across five major Indian cities like Mumbai, Bangalore, Pune, and Hyderabad, and claims to deliver 1.5 million meals every month.
“EatClub Brands is re-imagining how kitchens can operate through its innovative tech-first, full-stack cloud kitchen model. We are impressed with the company’s ability to achieve scale and customer loyalty, first with BOX8 and then with MOJO Pizza, while achieving impressive unit economics,” said Griffin Schroeder, partner at Tiger Global in a statement on Tuesday.
EatClub was one of the early movers in the cloud kitchen space, which started its journey with online delivery-only, D2C food brand, BOX8, offering all-in-one meals. While BOX8 has crossed the INR 1 billion revenue mark, its other popular brand MOJO Pizza has also become one of the largest home-grown pizza brands over the last few years, clocking INR 1.5 billion-plus in annual revenue, the company said.
The startup added that it controls its entire value chain—from procurement of ingredients to food preparation to the last-mile delivery—to ensure customer experience and business economics.
“We have been impressed by their first principles approach to building a new age food delivery platform. They have built multiple strong brands in a short span of time catering to the evolving Indian consumer,” said Nikhil Khattau, managing partner at Mayfield India, which was the first institutional investor in EatClub.
With the fresh fund, the startup plans to acquire delivery-first food brands, and help them with expansion, operations, and marketing.
“They can capitalize on our proprietary technology stack and existing kitchen network as well,” said Amit Raj, co-founder of EatClub Brands.”We now plan to rapidly scale geographically to 500 plus kitchens in 15 cities. We are also planning to aggressively onboard talent and build robust teams.”
So far, in the food tech space, Tiger Global has made investments in food delivery firm Zomato, and food brands Wow! Momo and Chaayos, both of which are present online as well as offline. Although, Wow! Momo was reported to be looking at venturing into the cloud kitchen business, those plans seem to be still a work in progress.
Cloud kitchens have been growing steadily in India since last year as more and more consumers are opting to get food delivered due to the COVID-19 pandemic. Earlier in October, Sequoia-backed Rebel Foods became the first cloud kitchen unicorn in the country after raising USD 175 million in a round led by Qatar Investment Authority. According to industry tracker Tracxn, between January and October 2021, Indian cloud kitchens firms raised USD 234.2 million in funding, as compared to USD 112.4 million in the entire 2020.