Illustration: Rahul Awasthi
Cloud kitchen company Curefoods, which operates ‘EatFit’, is in talks to raise $30 million in an equity funding round led by Accel and Chiratae, three people with direct knowledge of the development told ET.
The Iron Pillar-backed company will use the funds to acquire almost half a dozen smaller brands in the space and for other inorganic growth opportunities, they said.
“Given the inbound interest from investors, the company is likely to raise an extended Series B round, taking the total funding in the round to $75 million,” said a person aware of the company’s plans. “The remaining fund raise will be at a higher valuation,” he said.
Curefoods is also raising $10 million in debt from venture debt funds, sources said.
This funding follows the $13 million the company had raised from investors led by Iron Pillar in August this year as part of a series A round. Last year, health and fitness startup Curefit had carved out its health food vertical EatFit as an independent entity, to meet rising demand from the cloud kitchen sector.
Curefoods, which commenced operations in 2020, operates brands EatFit, Yumlane, Aligarh House Biryani and Masalabox. It has over 25 kitchens across four cities in India. The company has been acquiring and incubating multiple cloud-kitchen brands in the last few months. “The company is doubling its revenues quarter-on-quarter,” said another person with direct knowledge of the development.
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Ankit Nagori, cofounder of Curefoods, declined to comment on the latest fund raise.
Last month, the company had said it has acquired seven new direct-to-consumer food brands–MasalaBox, Paratha Box, Cake Zone, Ammi’s Biryani, Hyderabad-based pizza brands Olio and Crusto’s, and Chaat Street in Bengaluru.
There are several models operating in the cloud kitchen space, including those that are acquiring existing brands, to bring the cost of acquiring customers down, a space in which Curefoods operates.
Curefoods has taken over seven brands and plans to add 25 more. It’s targeting a mix of smaller brands with Rs 8-10 crore annual revenue run rate and those that have the potential to scale nationally and become Rs 100-crore businesses, Nagori had told ET in an earlier interview.
Cloud kitchens–cooking facilities devoted to the preparation of delivery-only food–have flourished. The total funding for cloud kitchen startups has doubled in 2021 to $234.2 million as of October, compared with $112.4 million in all of 2020, according to Tracxn data. To be sure, 75% of the funds raised this year went to Rebel Foods when it raised $175 million in a unicorn round last month.