Curefoods Reports Significant Growth in FY24
Indian cloud kitchen leader Curefoods has announced a remarkable 53% year-on-year increase in its operational scale for the fiscal year ending March 2024. This growth comes as the Bengaluru-based company successfully halved its losses by implementing substantial cuts in advertising expenses.
Curefoods’ revenue from operations surged by 53.17%, reaching Rs 585 crore in FY24, up from Rs 382 crore in FY23, according to its consolidated financial statement from the Registrar of Companies (RoC).
Overview of Curefoods’ Operations
Curefoods is a prominent cloud kitchen platform managing a variety of brands including:
- EatFit
- Yumlane
- Aligarh House Biryani
- Masalabox
- CakeZone
Currently, the company operates over 100 kitchens across 12 cities in India. The revenue generated from food sales constituted the sole source of income for the company in the last fiscal year.
Additionally, the company earned an extra Rs 50 crore from interest income, bringing its total revenue to Rs 635 crore in FY24.
Financial Breakdown
On the expense side, Curefoods experienced the following changes:
- The cost of materials increased significantly by 33.72%, totalling Rs 229.6 crore.
- Advertising expenses were reduced by 50.8% to Rs 52.8 crore.
- Employee benefits expenses rose by 43.18% to Rs 148.2 crore.
- Guarantee commission expenses climbed 56% to Rs 109.2 crore.
- Depreciation costs increased 45.2% to Rs 62 crore.
Consequently, Curefoods’ total expenses nearly doubled, reaching Rs 806.8 crore in FY24.
Thanks to the substantial reduction in advertising costs, the company managed to lower its net loss by 50%, down to Rs 172.6 crore in FY24. The Return on Capital Employed (ROCE) and EBITDA margin stood at -23.31% and -12.88%, respectively. On a unit basis, Curefoods spent Rs 1.38 to generate Rs 1 in FY24. As of March 2024, the firm reported Rs 326 crore in current assets, including Rs 37.5 crore in cash and bank balances.
Investment and Acquisitions
According to various sources from startup intelligence platforms, Curefoods has successfully raised over $200 million to date, with investments from notable entities such as:
- Three State Ventures, led by Binny Bansal
- Accel
- Chirate
- Alteria
Since its inception, the company, led by Ankit Nagori, has acquired more than a dozen cloud kitchen brands, including Yumlane, Smoodies, Cakezone, Maverix, and Nomad Pizza.
Market Position and Future Outlook
Curefoods stands as the second-largest player in the cloud kitchen sector, following Rebel Foods. Rebel Foods recently secured $210 million in one of the largest funding rounds of 2024, reporting an operating revenue of Rs 1,420 crore in FY24. Other significant players in this market include EatClub and Biryani By Kilo.
The company’s sharp reduction in advertising expenses reflects a trend of subpar brand building and a growing commodification of the delivery industry. The market is increasingly driven by platforms rather than by the restaurant or kitchen owners themselves. The long-term sustainability remains uncertain due to high dependency on these platforms, which may not favour margins. While certain sectors may expand, overall growth rates in the market are not keeping pace, leading to potential margin erosion.
Whether Curefoods can achieve profitability before further margin deterioration becomes a reality is uncertain. However, expectations indicate that 2025 will witness intensified efforts to mitigate the hold of Swiggy and Zomato on the food delivery landscape, albeit with a seemingly bleak outlook. Domino’s success story stands out, primarily due to its established delivery network, highlighting significant differences in operations.
