Hyderabad: Quick service restaurant chain Hello Curry Pvt. Ltd has acquired The First Meal, a food and delivery start-up which takes pre-orders for customized health food for cash and stock.
The acquisition allows Hello Curry to enter the breakfast and meal box segment, it said on Tuesday.
The food tech start-up industry has been facing shutdowns. Lack of sustainable growth models in a fragmented market and harder customer acquisition has seen investors shying away too, after the initial euphoria.
Hello Curry which specializes in Indian food has been positioning itself as a quick delivery, hygienic and convenient chain. This acquisition is Hello Curry’s attempt to draw a sustainable revenue model for the long term, even as its 33 outlets in Hyderabad, Pune and Bengaluru remain profitable.
“The (food tech) industry is falling apart and it is obvious that only the ones who take extremely strategic steps have a survival chance. We are evaluating venturing into different areas very cautiously," said Raju Bhupati, chief executive of Hello Curry.
Hello Curry, had earlier planned to expand to 100 outlets in the three cities it operates, by the end of 2016. “In this situation it is better to stay calm. But the design has to be profitable and in our trying to be better at economics we plan to enter the US and Australia soon," Bhupati said.
The company is in the process of raising $2-3 million to take care of the regular growth plan in India and would separately raise funds for overseas expansion in a few months.
The First Meal has a subscription platform and through their meal box concept it provides nutritious and consciously prepared food. Subscriptions can be profitable as the business is predictable and Hello Curry would only leverage the existing kitchens and infrastructure it has to reach the subscription customers.
Through First Meal, the company aims to sell 5,000 meals each day, within the next six months. Currently, First Meal serves five types of diet balanced breakfast items and daily changing nutritious lunches, tapping around 10,000 boxes a month, with 89% customer retention rate.
Through First meal, the company plans to conquer Hyderabad market in the next three months and will look to enter into Bengaluru and other key markets.
“In a market place that has no entry barriers, we think of ourselves as a long distance runner," said Sandeep Penmatsa, co-founder and chief of marketing of Hello Curry.
He said, the market is flooded with competition from street vendors who deliver food within ₹ 60-80, which is why the quality standards have taken a beating.