Pune fast food chain Faaso’s raises $20 mn, eyes urban expansion1 min read . Updated: 09 Feb 2015, 10:31 PM IST
Lightbox Ventures & Sequoia Capital lead the funding
Mumbai: Faaso’s Food Services Pvt Ltd, the Pune-based fast food chain on Monday said it has raised $20 million, led by Lightbox Ventures with participation from existing investor Sequoia Capital. The company had raised $5 million from Sequoia in 2011.
“Urbanization, emergence of nuclear families, dual income households are reasons for the growing demand for ordering food. Faaso’s is leveraging technology to ensure that it delivers quality food in a span of 20 minutes," Prashant Mehta, partner with Lightbox, said over the phone.
The company is looking to use the funds to expand to more cities, launch its new version of the mobile application, hiring people and marketing and branding initiatives. The company operates 90 distribution centers across six cities, it is looking at expanding to 25 cities with a network of 200 distribution centers.
“We are now a food technology company, 50% of the current centers are only kitchen set-ups that cook only for delivering food. Expansion to new cities, would be setting up our technology network rather than retail stalls," said Jaydeep Barman, founder of the company over the phone.
Mehta explains that the company has moved away from being a fast food to almost a food delivery company. The technology solution of the company allows customers to place orders through the mobile application or website, the location of the person ordering is tracked by the closed delivery center. Depending on the location of the consumer, the closest center displays only those items that are available in stock. Faaso’s also does realtime tracking of the orders.
The fast food market will more than double to ₹ 70 billion over the next three years from ₹ 3,400 crore in 2012-13 according to a report by Crisil Ltd. The report also states that the market is expected to reach a turnover of ₹ 7,000 crore by 2015-16, growing at an average annual rate of about 27%.