Hey Insiders,

I know it’s been a long time since we talked. But here I am. Back with a new business analysis. Today, we are discussing Cloud Kitchens.

See, the food delivery business in India is massive. And cloud kitchens are right in the middle of it.

• India’s online food delivery market was ~$8-9B in 2024.

• Projected to touch $15-20B by 2028 (Redseer, Statista).

• 60-70% of this is controlled by two aggregators: Swiggy & Zomato.

At first glance, cloud kitchens look like a low-risk, high-reward business. But the reality is far more nuanced.

Before you put your money into one, let’s do a brutally honest 360° analysis — including what India’s top players are doing.

1. Why So Many Entrepreneurs Are Attracted to Cloud Kitchens

• Low upfront capex (vs restaurants)

• Minimal real estate requirements

• Asset-light scalability across cities

• Rising demand for food delivery post-COVID

• Ability to run multiple brands under one kitchen

BUT these advantages have created massive competition.

2. The Economics (With Real Numbers)

Here’s a sample model for a 300 sq. ft. kitchen in Mumbai:

Assume:

• AOV: ₹350

• Break-even Orders: ~1900-2000 per month (~65 orders/day)

Key insight:
This is not a low-volume business. The economics only work at scale.

3. Hidden Traps Most First-Time Founders Miss

• High dependence on aggregators (80-90% sales)

• Commission squeeze (25-30% to Swiggy/Zomato)

• Constant marketing spends to stay visible on apps

• Thin loyalty — customers chase discounts

• Limited pricing power — huge price sensitivity

4. India’s Top Cloud Kitchen Players — How They Operate (And What You Can Learn)

🏆 Rebel Foods (Parent of Faasos, Behrouz Biryani, Ovenstory, Firangi Bake)

• Founded: 2011

• Valuation: ~$1.4 Billion (2023)

• Scale: 450+ cloud kitchens across 70 cities (India + overseas)

Their Playbook:

• Multiple brands under one roof

• Centralized procurement & kitchen automation

• Predictive demand forecasting using tech + AI

• Heavy backend tech stack: data-driven inventory, prep time optimization, ghost brands

• Operate not just B2C, but also license brands to third-party operators globally via "Rebel Launcher"

What you can learn:

• Scale backend operations early

• Build multi-brand portfolio to maximize kitchen utilization

• Invest heavily in data, tech, and supply chain

🏆 Curefoods (Parent of Eat.Fit, CakeZone, Great Indian Khichdi, Frozen Bottle)

• Founded: 2020 (by Cure.fit co-founder Ankit Nagori)

• Current size: 200+ cloud kitchens

Their Playbook:

• Acquired multiple smaller brands for faster growth

• Focus on specific niches like healthy eating and desserts

• Operates a mix of owned and partner kitchens (hybrid model)

What you can learn:

• Acquisitions can be a shortcut to scale

• Build niche-focused brands for differentiated recall

• Build multiple delivery channels (Swiggy/Zomato + direct)

🏆 Biryani By Kilo (BBK)

• Founded: 2015

• Unique model: Freshly cooked biryani in handi, delivered sealed.

Their Playbook:

• Hyper-focused on one category (biryani)

• High Average Order Value (₹600-800 per order)

• Superior customer experience → higher loyalty

• Own delivery fleet for some locations to reduce aggregator dependence

What you can learn:

• Focus wins over variety

• Build a differentiated product with premium positioning

• High AOV makes unit economics stronger

🏆 Box8 / Mojo Pizza

• Founded: 2012

• Multi-brand vertical (Box8 for Indian meals, Mojo Pizza for pizzas)

• Now also offering subscription models

Their Playbook:

• Subscription model: increase customer stickiness

• 2 brands = better asset utilization

• Own delivery fleet to control logistics & reduce aggregator dependency

• Very strong app & website order share (~30-40% comes directly)

What you can learn:

• Own your customer data → build direct D2C orders

• Subscription builds predictable revenue

• Delivery fleet gives better control over customer experience

🏆 FreshMenu

• Founded: 2014

• Early cloud kitchen pioneer, struggled in scaling aggressively vs new players

Their Playbook:

• Single brand positioning

• Chef-curated rotating menus

• Heavily dependent on direct app orders

What you can learn:

• Menu innovation works but requires constant refresh

• Single-brand models are riskier without strong differentiation

• Early mover advantage can fade if backend operations are weak

5. What Are These Big Players Solving For?

6. India-Specific Cloud Kitchen Realities

• Metro cities (Delhi, Mumbai, Bangalore) are saturated

• Tier-2 cities are growing (Indore, Lucknow, Jaipur, etc.)

• Regulatory tightening on FSSAI norms

• High competition from aggregator-owned brands (e.g. Swiggy’s "BrandWorks")

• Labour costs are still affordable vs Western markets → big operational advantage

• Real estate cost is a killer for expansion (even for cloud kitchens)

7. What It Will Cost You to Start

Important:
Most small founders underestimate the working capital needed for the first 6-12 months.

8. The Harsh Reality of Aggregator Dependency

Unless you build your own direct order channels, you are renting your customers.

9. Who Should Seriously Consider Starting?

✅ You have prior F&B or operational experience.
✅ You have enough capital to sustain losses for 12-18 months.
✅ You can build strong backend operations.
✅ You plan to differentiate — via niche, product, experience, or tech.
✅ You have a plan to build D2C channels from Day 1.

10. TLDR: Cloud Kitchens Are NOT Easy Money

Final Verdict:

The real winners in this space are not the best chefs.
They are the best operators.

See you in the next one. Super soon! :)