Why smart appliances have VCs hooked

Over the past six to twelve months, they have backed about half a dozen startups, including Beyond Appliances, Upliance, and Karban, with $1-4 million early-stage cheques.  

While Beyond Appliances and Upliance are automating cooking functions through AI, Karban leverages CFD (computational fluid dynamics) technology and aerospace engineering to optimize the efficiency of airflow devices like fans and air purifiers. On2cook, Alste Technologies and Keus have also raised funding to make kitchens smarter through technology.

Also Read: Startups turned to venture debt amid funding winter. Now they’re facing the heat

Consumer appliances brand Atomberg Technologies was among the first new-age companies to have tapped into the segment. It raised $86 million in its series C funding round led by Temasek Holdings and Steadview Capital Management in 2023. 

The company, which launched a series of IoT-enabled smart ceiling fans in 2023, is growing rapidly and has seen its revenue from operations rise 31.5% to ₹848 crore in 2023-24 from ₹645 crore a year ago.

The Indian kitchen appliance market is ripe for innovation yet remains largely untapped in terms of smart, consumer-centric solutions, according to Vinay Singh, co-founder and partner, Fireside Ventures, which led a $2 million funding round in Beyond Appliances in November 2024.

“The consumer of kitchen appliances is changing rapidly, driven by key trends such as the desire for convenience, the importance of safety, and the need for enjoyable kitchen experiences. With a projected market size of $5.5 billion and a compound annual growth rate (CAGR) of 9.86% over the next five years, this space offers tremendous potential," Singh told Mint, noting the smart kitchen space is at an inflection point, with consumer demand shifting toward intelligent, connected appliances that solve real, everyday problems.

Also Read: India sees more startups encashing Esops in 2024 in pre-IPO, secondary deals

Beyond Appliances, for instance, launched just six months ago and has already seen over 1,200 customers across major metros.

The opportunity 

To be sure, the overall smart appliance market in India is projected to grow by 8.56% from 2024 to 2029, resulting in a market volume of $4.6 billion in 2029, according to research platform Statista.

“We have aggressive growth plans for 2024-25, supported by our upcoming launch of eight new innovations and strategic expansion into more cities. We are looking to become a ₹100 crore brand in two to three years," Eshwar K. Vikas, chief executive and co-founder of Beyond Appliances, told Mint.

Despite people spending two to three hours daily in their kitchens, these spaces have seen minimal technological innovation, according to Vikas. “Our research shows that consumers, particularly in the 35-50 age group, are actively seeking solutions that make cooking more efficient and enjoyable," he said, adding that the company has identified several opportunities in the smart kitchen space and is developing AI-powered features and IoT integration capabilities.

Upliance, with one flagship product, a smart cooking assistant, is looking at new product lines, including new hardware accessories to enhance versatility and speed and features or services leveraging AI, like personalized meal planning or health-focused add-ons, according to Mahek Mody, co-founder and chief executive of the startup.

Also Read: Quick medicine delivery: Startups gear up against giants Flipkart and Swiggy 

He added the company recently hit an annual revenue run rate of over ₹15 crore.

These companies are leveraging the latest technologies to address the unique needs and preferences of Indian consumers, helping their growth, said Shivaraj Jayakumar, practice leader, consumer and internet at business consulting firm Praxis Global Alliance.

He said changing consumer preferences for using the latest technology, openness to adopting smart home solutions, and recognition of their potential to improve efficiency and convenience in the kitchen are driving interest in these companies.

Dinesh Pai, vice president of business analysis and investments at Rainmatter by Zerodha, which invested in smart kitchen company Upliance, said, “Our investment in Upliance was based on the view that as more and more youngsters eat outside, the chances of them eating unhealthy foods only keep increasing. We need solutions that make it easier for Indians to cook food at home. Upliance does just that."

Traditional players are also catching up with the new trend of smart appliances. Wonderchef, founded in 2009, launched Chef Magic, an all-in-one kitchen robot with fully automated cooking processes, in April. The company, however, last raised funding in 2021, showing a muted investor sentiment. Other popular traditional appliance startups such as Femora and Vaya haven't raised any capital yet.

The challenge

As most of these companies cater to the premium segment, pricing could be a challenge. “Smart kitchen appliances are still in their infancy in India, offering significant headroom for growth and share gain for early movers. However, consumers are still largely price sensitive, and companies will need to offer competitive pricing to drive adoption," said Jayakumar.

However, Vikas believes pricing won’t be a problem for the company as customers acknowledge the value-add. “When you look at our smart hob range starting at ₹15,000 and going up to ₹24,500, it competes effectively with traditional four-burner hobs priced around ₹15,000, but offers significant additional value through features like Flame Failure Detection and digital timers…What's encouraging is that customers clearly recognize this value equation," he said.

Also Read: Indian edtech startups niche down into nursing, allied healthcare upskilling

At the same time, Upliance is exploring lower-cost variants or subscription options to make the product accessible to more households, Mody said.

These companies would also need to overcome infrastructure challenges like limited broadband connectivity and power outages that can impact user experience.