MK Dabbawala, which was launched in April, sells ethnic Indian cuisine on a daily changing menu and contributes about a quarter of the Bengaluru-based company’s revenue, said cofounder and CEO Gaurav Jain, unwilling to disclose further financial details.
“We were using some of our restaurant kitchens, but are now investing into more delivery-only or ‘dark’ kitchens, as we were not able to service the growing demand,” Jain said. “We were handling 400-500 deliveries a day from our restaurant kitchens, but we are now surpassing that.”
It plans to establish another 13 kitchens to touch 25 by March next year. This will be a mix of dark kitchens and it will convert a few existing kitchens also to service the MK Dabbawala business. It currently delivers in 12 locations in the city, of which four are from dark kitchens.
MK Dabbawala serves 2,500 orders a day, which translates to 4,000 meals, in Bengaluru, Chennai, Pune and Hyderabad. Currently it gets 1,600 orders a day from its own app and website with the balance from other marketplaces.
“Food business is now moving towards delivery and is cheaper to service than dine-in – which is bringing in a lot of transition in how we want to shape our business going forward,” Jain said.
It costs Rs 10 lakh to convert an existing Mast Kalandar kitchen to incorporate business from MK Dabbawala, while it costs Rs 15 lakh to set up a dark kitchen, Jain said.
“This is a healthy margin business and that’s why it is contributing to our cash flows in a positive manner. It (MK Dabbawala) contributes to 40% of gross margins,” Jain claimed.
The company is also looking to raise $20 million (Rs 132 crore) in a fresh round of funding early next fiscal year, after which it plans to take it’s the Mast Kalandar brand to Mumbai and Delhi, with 20 outlets in each city. It will also open 60 dark kitchens each in these cities to service both MK Dabbawala and Mast Kalandar.
“We will continue to have a retail presence but will have lesser number of stores. We can service the entire area through dark kitchens and the brand will get establish with retail presence,” Jain said.
Mast Kalandar has 65 outlets in four cities. About 45% of orders (5,000-6,000) from Mast Kalandar are delivery only as well. The company has 150 delivery boys and works with a few third-party logistics players as well. It is backed by Helion Ventures and Footprint Ventures that have together put in more than $10 million.
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