After witnessing a 30% reduction in its scale during FY21, EatClub Brands (previously Box8) has managed a two fold growth in FY22 while also touching the Rs 210 crore mark at the same time.
EatClub’s revenue from operations spiked 96.3% to Rs 210 crore in FY22 from Rs 107 crore in FY21, according to its annual financial statements filed with the Registrar of Companies (RoC).
EatClub manages nine brands including Mojo pizza, Zaza biryani, Bhatti chicken wings, Globo ice cream, Box8, NH1 bowls, and others. Revenue from these brands formed 98.6% of the total collections which increased 93.5% to Rs 207 crore in FY22 from Rs 107 crore in FY21.
The remaining collections for the Bengaluru-based company came from membership fees of customers’ subscriptions to EatClub Pro. This income was recorded at Rs 3 crore during FY22.
In line with its scale, the cost of procurement surged 107% and turned out to be the largest cost center for EatClub which accounted for 32% of the overall expenses. This cost stood at Rs 83 crore in FY22 as compared to Rs 40 crore in the previous fiscal year (FY21).
EatClub’s employee benefit cost surged 72.4% to Rs 50 crore in FY22 from Rs 29 crore in FY21. With the expansion of influencer marketing and onboarding of actor Raj Kumar Rao and actress Sara Ali Khan as brand ambassadors, its advertising cost ballooned over 6X to Rs 28 crore in FY22 from Rs 4.5 crore in FY22.
The company added another Rs 28 crore as contract labor charges which pushed the overall cost of the company by 103.9% to Rs 259 crore in FY22 from Rs 127 crore in FY21.
Meanwhile, its losses shot up 2.5X to Rs 45 crore in FY22 from Rs 18 crore in FY21. The Tiger Global-led company spent Rs 1.23 to earn a single unit of operating revenue.
EatClub directly competes with Rebel Foods which scaled 116% and surpassed Rs 900 crore in revenue during FY22. Rebel’s losses increased 55% and stood at Rs 564 crore in the same period. Its other direct competitor includes Curefoods which is yet to file FY22 numbers.
EatClub, which started out as Box8 over a decade ago, was one of the early entrants to the cloud kitchen space. With online food ordering on the rise in India, cloud kitchen companies are benefiting, which is reflected in the scale that the company has achieved. And when compared to its peer Rebel Foods (even though their scale is over 4x higher), EatClub has managed to better control its losses.
However, that is no guarantee of its long term success or attractiveness to investors, as many would argue that Rebel Foods has created the more powerful brands, giving it a long term edge.