Unpacking Curefoods’ scale through numbers

Post pandemic, the food industry has achieved decent growth with cloud kitchen brands leading the way, thanks to their cost effectiveness and smooth supply chain. The opportunity in cloud kitchens is apparent from the spike in Curefood’s scale which touched Rs 90 crore in 18 months of its operations.

Curefoods recorded Rs 89.1 crore in revenue from operations during the fiscal year ending March 2022. It posted Rs 1.96 crore from the same for a six months period (10 October, 2020 to 31 March, 2021), according to its consolidated annual financial statement with the Registrar of Companies (RoC).

It's worth noting that the last fiscal year was the first full operational year for Curefoods. During FY21, it was operational for only six months (from 10th October 2020 to 31st March 2021).

Curefoods sells food and beverages via its brands (EatFit, Yumlane, Aligarh House Biryani, Masalabox, CakeZone) and the sale of food items emerged as the main source of revenue which stood at Rs 88.4 crore in FY22. It also generated Rs 70 lakh from franchisee and royalty income during the year.

Curefoods also booked Rs 4.63 crore as miscellaneous and other non-operating income which took its total collection to Rs 93.7 crore in the fiscal year ending March 2022.

Founded by Cultfit co-founder and former Flipster Ankit Nagori, Curefoods is a cloud-kitchen platform that operates brands like EatFit, Yumlane, Aligarh House Biryani, Masalabox, CakeZone, and more. As of June 2022, it has over 100 kitchens across 12 cities in India.

On the expense side, the cost of materials turned out to be the largest cost center, forming over 23.2% of the total expenditure, and stood at Rs 38.2 crore in FY22. Employee benefits and promotional expenses were other major costs for Curefoods and registered at Rs 26.9 crore and Rs 26.44 crore respectively in FY22. Significantly, employee benefits cost also includes ESOP expense of Rs 1.7 crore.

The Bengaluru-based firm spent Rs 16.85 crore and Rs 13.65 crore respectively on commissions and legal services in FY22 while it incurred Rs 6.1 crore on delivery and transportation charges. Curefoods also booked information technology expenses of Rs 2.05 crore which pushed its total expenditure to Rs 165 crore during FY22.

Curefoods spent almost 1.8X of its operating revenue and its losses stood at Rs 71.25 crore in the last fiscal year. Its cash outflows from operations registered at Rs 65.3 crore during the year.

As per Fintrackr’s analysis, its EBITDA margin and ROCE placed at -56.31% and -10.18% respectively in FY22. On a unit level, Curefoods spent Rs 1.85 to earn a rupee of operating revenue during the same period.

Curefoods has raised around $128 million to date and was last valued at around $390-395 million following a $46 million worth Series C round in June 2022. Two months later, it launched Season 2 of Curefoods Accelerator Programme to back brands in the space. The company also acquired minority stakes in milkshake brand Frozen Bottle and expanded its snacks portfolio.

Curefoods broadly competes with EatClub (previously Box8), which recorded Rs 210 crore in revenue and a Rs 45 crore loss during FY22 while another competitor Rebel Foods’s income stood at Rs 859 crore with a loss of Rs 564 crore during the same period.

While part of the high losses can be put down to the peculiar feature of large funding rounds in recent times, the fact remains that much has been expected of Curefoods for a while, as reflected in its strong backing so far. So far, like its peers, it has demonstrated that a market exists, without quite demonstrating how and when it can make money in that market.