Not facing a slowdown in food delivery, says Rebel Foods co-founder Sagar Kochhar

Not facing a slowdown in food delivery, says Rebel Foods co-founder Sagar Kochhar

Unlike listed food delivery majors Zomato and Swiggy, Rebel Foods – the cloud kitchen startup that runs brands such as Faasos, Oven Story, Behrouz Biryani and others – is not facing any slowdown in its food delivery business, and is on track to turn profitable next year, said Sagar Kochhar, co-founder and CEO of EatSure, Rebel Foods.

"We are not facing a slowdown in food delivery. We are growing at over 20 percent SKSG (Same Kitchen Sales Growth) on a year-on-year (YoY) basis. This is on account of the ability of our model to be able to serve multiple food missions from the same infrastructure," Kochhar told Moneycontrol.

This comes at a time when growth in India’s food delivery market has decelerated. Listed food delivery majors Zomato and Swiggy, which operate in a duopoly market, have reported slowing growth over the past few quarters, amid an ongoing slowdown in consumption.

Both firms have faced challenges in onboarding new customers and even scaling beyond the top eight cities, according to analysts.

To be sure, Kochhar’s indication of over 20 percent YoY growth is close to what Swiggy and Zomato have reported. In their December quarter results, Swiggy reported a gross order value (GOV) growth of 19.2 percent YoY, while Zomato reported a 17 percent yearly increase.

Growth for them has, however, slowed on a sequential basis. Swiggy’s GOV grew just 3.4 percent quarter-on-quarter (QoQ) in Q3 FY25, while this figure was just 2.3 percent for Zomato.

While Kochhar did not provide sequential growth figures for the business, he said that the company has been witnessing strong growth in same-kitchen revenues on a monthly as well as yearly basis, and, on the back of this, is expecting to turn profitable next year ahead of its planned initial public offering (IPO).

“At a kitchen level, we were always profitable. Overall there is massive operating leverage which will lead to profitability in the next year…Our revenues from same kitchens are growing month-on-month and year-on-year, and that is flowing down to our bottom line,” he said.

According to the company, its earnings before interest, taxes, depreciation and amortisation (EBITDA) burn has come down to less than Rs 10 crore in December 2024.

Rebel Foods launched EatSure in 2020 to consolidate food delivery for its brands and partner restaurant chains. It is currently operating in around 75 cities across India.

Over the last couple of years, Rebel Foods has been seen making improvements in its financial health. The company generated a revenue of Rs 1,420 crore in FY24, a 19 percent increase from Rs 1,195 crore in FY24, while reducing its losses by 42 percent, from Rs 657 crore in FY23 to Rs 378 crore in FY24.

The cloud kitchen firm was able to close a massive $210 million funding round in December last year after improving its financials through measures like reducing its workforce and cutting overall spends.

Rebel Foods has also become the latest player to jump on the 15-minute food delivery bandwagon through the launch of its own rapid food delivery service, QuickiES, in Mumbai, with a promise of free orders if it fails to meet its delivery deadline.

“In the India market, quick food delivery is the new reality…We anticipate that we should be able to fulfil a majority of our orders within that (15-minute) time frame. We have piloted it for the last few months, and were operating at a 90 percent plus success rate, which gave us a lot of confidence,” Kochhar said.

This comes at a time when 15-minute food deliveries are picking up in a big way, with several companies jumping into the mix by launching their quick delivery services.

Like Swiggy, which recently rolled out a separate app for quick food delivery called Snacc, Rebel Foods has also spun off a QuickiES app, available for download for Android and iOS. Through this service, Rebel Foods is offering popular dishes from its brands, as well as a new selection of “café-style snacks” such as samosas, idli, medu vada, pakoras, poha, puffs, instant noodles, sandwiches, hot beverages and a range of milkshakes.

Over the next month or so, the company will assess how 15-minute food deliveries fare across Mumbai, before potentially scaling up further in other metropolitan and Tier 1 cities.