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BENGALURU,NEW DELHI :Peak XV-backed Rebel Foods that owns Faasos, Behrouz Biryani and Mandarin Oak is working towards an initial public offering (IPO), which would make it the country’s first cloud kitchen business to go public.
Peak XV-backed Rebel Foods that owns Faasos, Behrouz Biryani and Mandarin Oak is working towards an initial public offering (IPO), which would make it the country’s first cloud kitchen business to go public.
Rebel Foods plans to file its draft share sale papers in the later half of the year and list on exchanges next year. “An IPO is an important milestone for the company since it became a unicorn. It is looking at a 2025 time frame to get listed," a company spokesperson said.
Rebel Foods plans to file its draft share sale papers in the later half of the year and list on exchanges next year. “An IPO is an important milestone for the company since it became a unicorn. It is looking at a 2025 time frame to get listed," a company spokesperson said.
The company is yet to appoint merchant bankers for the process, and is currently doing the back-end work to turn compliant with regulations, a person familiar with the development said. Rebel Foods’ losses soared in 2022-23, but its margins improved during the last year, the person said on the condition of anonymity.
Founded in 2011 by Jaydeep Barman and Kallol Banerjee, Rebel Foods operates cloud kitchen brands such as Faasos, Behrouz Biryani, Oven Story Pizza, Mandarin Oak, The Good Bowl, SLAY Coffee, Sweet Truth, Wendy’s, apart from operating offline stores in India. In all, it operates over 450 kitchens in over 70 cities. It has a portfolio of over 45 brands across multiple countries—India, United Arab Emirates (UAE), Saudi Arabia and the UK.
The company has also stepped into the offline business with its food court format EatSure and its recent association with fast food chain Wendy’s in India. It currently operates under 10 EatSure formats in different cities selling everything from biryani to pizza, cakes and coffee, and plans to open more in the coming years.
“Rebel has evolved from a physical restaurant service with one brand to an online restaurant business with multiple brands serving customers across multiple occasions. At over 400 kitchens, it has reached a point where network effects have kicked in at scale—consequently, this ability to have multiple brands in existing kitchens allows the business to grow faster than the industry average," said Sandeep Murthy, partner, Lightbox Ventures, an investor in Rebel Foods. Murthy declined to comment on the company’s IPO plans.
Lightbox invested in the business when it had 90 outlets. “Rebel is able to drive growth by both adding kitchens as well as adding newer brands in its existing kitchens," Murthy said.
In 2023, Rebel Foods, which already held exclusive cloud kitchen (delivery-only) franchisee rights for Wendy’s in India, signed a deal to completely manage and operate the brand’s traditional restaurants across India. In 2022, it acquired a majority stake in Smoor, a luxury chocolate brand. Rebel Foods did not disclose the size of the investment but said the deal valued Smoor at more than $50 million.
The IPO plans come as the food services industry faces a slowdown on account of high inflation and intense competition. The cloud kitchen market mushroomed when the pandemic forced restaurants to shut; however, with as market opened, offline chains stepped up expansion.
In 2021, Rebel Foods turned unicorn after raising $175 million in a funding round led by the sovereign wealth fund Qatar Investment Authority. The round that valued the startup at $1.4 billion also saw participation from existing investors Coatue and Evolvence India. In April 2023, it secured $9.1 million in a debt funding round from Northern Arc and Stride Ventures. The company forayed into overseas markets in 2019 with the launch of its services in the UAE and Indonesia. In 2021, Rebel Foods had announced plans to invest $150 million to acquire and scale new food brands in India and globally.
Rebel expects both offline and online formats to grow going forward.
“With advantages like low initial investment requirement and operating costs, higher profit margins, and relatively easier geographic expansion, cloud kitchens have taken the food service industry by storm," said Pakhi Saxena, head of retail and consumer products at Wazir Advisors.
In 2021-22, the cloud kitchen market was estimated at $800 million. While the cloud kitchen market witnessed a slowdown due to the pandemic, it is expected to grow at a 24% compound annual growth rate during FY22-FY26 to reach $1.9 billion in 2025-26, according to a March report by Wazir Advisors. However, the market is still small when compared to quick service restaurant chains and casual dining restaurants, which account for nearly 80% of the $27.1 billion organized food service market in India.
In 2022-23, Rebel Foods’ revenue from operations grew 19% to ₹940 crore against ₹789.16 crore reported in the previous fiscal; the food services company incurred a loss of ₹670.2 crore in 2022-23 against ₹520.34 crore in the year-ago period, according to data sourced Tofler.
The board of directors are confident that the company will break-even soon and have a high growth rate in the years to come, according to the company’s regulatory filings last fiscal.
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