THE TIMES OF INDIA: Foodtech startups revert to old recipe for success
THE TIMES OF INDIA: Orders have crossed 4,50,000 a day for food delivery startups across the country — and they are looking forward to a feast after the funding famine of the past few years
NEW DELHI: Investors seem to have started 2018 with a healthy appetite for foodtech startups after going slow in 2016 and 2017. Last week, Zomatoreceived $150 million in funding from Alibaba’s Ant Financial, and Swiggy raised $100 million from South Africa’s Naspers and Chinese e-commerce company Meituan-Dianping last month. Cab aggregator Ola acquired Foodpanda for about Rs 40 million a few months ago to take on UberEats.
Money flowed to foodtech startups in 2014 and 2015, but in the subsequent drought, a number of companies such as Cyberchef, EatOnGo, Mealhopper, Yummist and Biteclub shut down. Even larger players like Zomato laid off staff and scaled back as they realised that unrealistic discounts and a high cost of customer acquisition made poor business sense. The ones that survived cut costs and improved their business model.
The daily order volume has increased from 2,00,000 in 2016 to 4,50,000 in 2017. An analysis by RedSeer Consulting finds that unit economics for the industry is beginning to make sense with operating margins of around 7%.
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