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Food Tech Startup Swiggy Considering To Set Up Cloud Kitchens For Better Revenues

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In a bid to further bolster its presence across the country and device better revenue generation strategies, Bangalore based food delivery startup Swiggy has announced to open kitchens in areas where the partner restaurants lack a physical presence but are likely to lure in high amount of customers.

These so called cloud kitchens will serve the purpose of preparing food for incoming orders, with no dine-in facilities. This means you can only order the food from these kitchens through Swiggy app.

Food Tech market has lately been falling short of investments, which is causing a sheer distress among giants dominating the segment. The series of layoffs by Zomato and TinyOwl perfectly highlighted the issues.

Swiggy has received a hefty investment from investors but happens to have expenses at same scale. Unlike TinyOwl or Zomato, which partner with third-party logistics firms to fulfil orders, Swiggy maintains a 2,700-member delivery fleet.

Swiggy believes that setting up such kitchens will let them expand their present to a larger population and also generate better revenue. Investors have started to restrain themselves from investing much in food tech, which makes it highly important for companies to think of effective methods.

Swiggy might also make an investment while setting up such kitchens and divide the profits accordingly. However, no financial information has been provided so far.

Swiggy started operations in August 2014 in the Koramangala neighbourhood of Bangalore and claims to be growing at a very fast pace since. The startup was co-founded by BITS Pilani Alums Sriharsha Majety & Nandan Reddy, along with ex-Myntra developer Rahul Jaimini.

One of the key features of the platform is its live tracking facility. Either through its website or its mobile application, users can track the location of the delivery executive.

Ensuring promise of a hassle free delivery, Swiggy has committed itself to a 30 to 45 minute order and delivery processing time frame. Swiggy has also kept out the ordering obstacles like the minimum order policy, for all its partnering restaurants.

Swiggy grabbed a $2 Million from Accel partners and SAIF Partners in April, and a whopping $16.5 Million in Series B round led in June by Norwest Venture Partners, with participation from Accel, SAIF and others.


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