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  • By admin / June 19, 2018

     

    The first tranche of about $5 million has already been invested in the Bengaluru-based firm

    Food delivery startups such as Zomato and Swiggy are setting up cloud kitchens that can augment the sourcing of food for deliveries in all parts of expanding metropolitan cities. While all of them are keen to get into the cloud kitchen setting up race, Zomato appears to have just pulled ahead as it is set to invest Rs 100 crore in tranches in Bengaluru-based Loyal Hospitality exclusively for the cloud kitchen project and a third of this amount, around Rs 30 crore has already been invested.

    Loyal Hospitality has plans of setting up around 10,000 kitchens across the country. This decision of Zomato to make an investment in the operations of a third party also means its in-house project Zomato Infrastructure Services, floated to set up kitchens is being given a burial. The only kitchen setup in Dwarka, a Delhi suburb is being closed down. The progress in the setting up of cloud kitchens is not, however, to the satisfaction of the company; its rather slow.

    As per the agreement, the kitchens dedicated within this agreement will serve only Zomato’s orders exclusively. To start with, there will be around 200 kitchens spread across Bengaluru and over time other cities could be opened in stages. Restaurants that Zomato has tied up for this phase in Bengaluru, include Empire Restaurants, Adigas, Hyderabadi Biryani House and Al Bake and so on.

    The cloud kitchen model is expected to result in the expansion of their overall customer base and the food delivery companies are offering incentives to make exclusive tie-ups with the restaurants.

    Market sources have indicated that the other players in the same business, Swiggy and Uber Eats were also eyeing a tie-up with Loyal Hospitality, but Zomato appears to have pipped them to it.

    Swiggy has issued a denial that it was involved in any kind of talks of this nature. There are many other contenders to the cloud kitchen cake with players like Faasos, Freshmenu, Holachef and Box8. It is understood that almost all of them are being wooed by the online food order and delivery companies, whether it is Swiggy, Uber Eats or Ola’s Foodpanda.

    Swiggy’s project for setting up cloud kitchens is called Access and it may start with the Northern part of the country before moving out to the other zones. The numbers so far indicate Swiggy and Zomato are the major rivals in the space with 10 million and 7 million orders being processed and delivered on a monthly basis respectively. The other two companies also in the fray are Foodpanda and Uber Eats, with figures of 40,000 and 25,000 monthly orders.

    From the restaurants’ view point also, they are seeing a rapid increase in the proportion of orders being received through the online route as compared to the dine-ins and takeaway from their facilities.

  • By admin / June 19, 2018

    The restaurant listing and food delivery company Zomato has invested an undisclosed amount of money in a Bangalore-based cloud kitchen company Loyal Hospitality. Loyal Hospitality and Zomato, both confirmed the development to MediaNama. According to various media reports, amount of the deal is $15 million.

    Meanwhile, Zomato is shutting down its own cloud kitchen operations under Zomato Infrastructure Services (ZIS) due to expansion concerns. Confirming both the development, Zomato’s spokesperson  Naina Sahni said that,

    We have made a small investment for a minority stake in Loyal Hospitality. The purpose of ZIS was to bridge the supply and demand gaps in various micro localities across the country. We only had one pilot kitchen in Dwarka, and we are in the process of winding it down. We learnt that experienced people from the industry like Junaiz should be running operations like this. Hence we decided to back his ambitions with some capital and a lot of experience and data from what we do best – generating consumer demand for great restaurant brands.

    At the core, we want the restaurant industry in the country to grow as that directly helps us grow. We will do whatever we can to enable the growth of the restaurant industry and provide better food to more people.

    Loyal Hospitality was founded in 2014 by Junaiz K, who was earlier associated with Empire Group of Hotels in Bangalore for 25 years. The company provides ready-to-occupy Kitchen to the restaurants along with other operations solutions. These kitchens are equipped with the required amenities. And these outlets operate as a delivery-only branch, and will not have any dine-in facility.

    Speaking with MediaNama, Firdos Khan, the Chief Business Office of Loyal Hospitality told that the company will use the fresh funding to expand its operations. The company has already associated with 79 restaurants in Bangalore currently. Going ahead, it plans to open 10 kitchens in next six months and expand to seven cities by end of this year. Khan added that in three years, it plans to have 500 outlets across India.

    With this investment, Zomato might be looking at gaining a competitive edge against its rival Swiggy, which launched its own kitchen services in January 2017, and then later launched Swiggy Access, a programme which allows restaurants to move into or set up a kitchen in newer neighbourhoods in November 2017.

     

     

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