TastyKhana receives strategic investment from DeliveryHero

TastyKhanaDeliverHero

[Updated on 13 June] So, Tastykhana has announced on their blog about receiving 5m reportedly valued at 15-18m.

TastyKhana (website) is a food home delivery company having a presence in 6 cities across India. According to reliable sources, it has received strategic investment from either Global Founders Capital or directly from DeliveryHero, a European company having presence in 13 countries across 4 continents. DeliveryHero had raised 50m last year for global domination [Techcrunch news]. India will be their 14th country. Global Founders Capital is a joint VC fund by Samwer Brothers and ex-CEO of DeliveryHero Fabian Siegel having $194M in its warchest right now. As I pointed in the rear end of my blog post earlier, food home delivery is an increasing revenue generator for not just mom and pop food joints, but also fine dining like Speciality Group’s Mainland China, Mezzuna etc.

DeliveryHero

The journey of TastyKhana has been a long story of patience, conviction, determination, customer-focus, and pivoting like any start-ups. I had heard Shachin Bhardwaj speak at Startup Saturday Pune in Sep 2011. He had started TastyKhana during his tenure at Synygy in Aug, 2007. He quit his IT job within 3 months to focus on his start-up fulltime. For a year, they were experimenting before finding focus. So, in real sense TastyKhana started in Oct 2008. They had delivered food worth Rs. 3.5 Cr by Aug 2011 (8 Cr now) to more than 50,000 customers (now in 1.5 years it has doubled to 100,000). They had only 200 restaurants in Mumbai and Pune on-board at that time, which has swelled over 500 (348 in Pune, 108 in Mumbai) in Aug 2012 and then to 1000 in Pune, Mumbai, NCR (Delhi, Noida, Gurgaon) and Bangalore now Apr 2013 [Source: Restaurant Owner page]. They were receiving 5000 orders a month of an average ticket size Rs.700-800 in 2012. Shachin was able to get angel funding from one of his previous colleague, Chetan Shah to scale up. One of the learning he shared is to take funding in Lacs, not in Crores, so that you learn fiscal responsibility. Interestingly, TastyKhana was just 20 days away from bankruptcy during first 6 months’ of their existence, which is one of themes covered in an earlier blog post.They acquired Food On Wheels to get on-board 3-4 delivery boys, so that they could use own technology solutions to improve the operations. They focussed on solving the following problems of customer:

  1. Serve as aggregator of menus. No more do you need to keep paper menus stuffed in fridges, but have it online, when doing food order.
  2. A customer could use online payment options instead of just COD (Cash on Delivery).
  3. 3 channels to order available are: Online, mobile (using site at that time, now also mobile app) and phone (by calling TastyKhana helpline).
  4. Another convenience factor for a customer was increasing the radius of home delivery of a restaurant by paying a delivery fee, which the restaurant would normally not deliver. TastyKhana was able to achieve this because of its own delivery boys’ network in the city. The customer incurs cost according to delivery distance and order amount, e.g. if order is a small ticket-size and the location is far from restaurant, the charges are more.

For a restaurant owner, they had the following proposition:

  1. Zero overhead with great margins.
  2. Keep the bottom line low, as logistics is taken care of by TastyKhana. They only pay for orders, not for idle delivery boys’ entire time [I call it Operations as a Service, OAAS ala SAAS (Software as a Service)]
  3. Get alternate sales channel on TastyKhana website, phone line and also Facebook app for food ordering and reservation.
  4. In addition, there is valuable data, they get free statistics, feedback from customer on switching, churn ratio and spending capacity of the area’s customers.
  5. While dropping food orders of a restaurant, they are able to drop TastyKhana branded menu of other restaurants.

The technology differentiator has been built by CTO, Sheldon D’Souza and Senior Software Architect Pradeep Singh (First employee of the company).

  1. Focus on automation and scale
  2. Acceptance notification of food order from restaurant
  3. SMS to delivery boy

Once TastyKhana reached scale, they are able to deliver invaluable analytics like “Chinese food eating customers are spending more than Rs.1000/-“. This insight can help someone looking to start a restaurant.

Competition

It’s a crowded market for sure with Europe based Justeat (Jan 2011 investment into Hugryzone. Raised 41M afterwards), Foodpanda (launched June 2012 in India) and home-grown players like titbit, Deliverychef, Delivery, Bigbite etc. Some of these power local search engine like burrp (powered by JustEat) , while India’s leading local search engine forayed into food home delivery on its own. Most restaurants have a phone line for home delivery, while many take orders online and in mobile apps as well.

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About prasoonk

Prasoon Kumar grew up in the Bokaro Steel City of south Bihar, now Jharkhand. He studied Computer Science and Engineering in IIT Kanpur. For job he moved to the land of opportunity United States. He was there in the bay area through the internet revolution of mid to late nineties. He spent time admiring the beautiful coastline of California among other things. He moved east coast to the New York after the turn of the millennium working in a brokerage startup. Afterwards, he is back to India for the past few years. He has been working in the internet startup, enjoying the city life. He has a beautiful wife, a young 5 years old daughter and 11 years old son.

Posted on May 1, 2013, in Bangalore, Digital Media, eCommerce, Facebook, India, mobile, Mumbai, outsourcing, Pune, Restaurant, Social Media, Twitter, Web, web 2.0 and tagged , , , , . Bookmark the permalink. Leave a comment.

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