Online restaurant Faasos, riding a surge in domestic revenue, is venturing into international markets seeking to capture the next leg of growth.
Faasos Food Services, which operates the brand Faasos, is preparing to establish its first batch of multi-brand cloud kitchens in Dubai. It will have three kitchens operational in the city by the first quarter of 2019, which will see the firm launch its brands Faasos, Behrouz Biryani, Oven Story and Firangi Bake in the Middle East. Faasos expects to close fiscal year 2018-19 with Rs 300 crore in net revenue.
The firm said it ended 2017-18 with Rs 147 crore in net revenue and cut its loss by half from FY17, when it clocked a loss of Rs 82 crore. On an operational basis, Faasos Food expects to be profitable by the end of 2018-19.
The FY18 financials are unaudited and may see a minor change when the company files its audited results.
The company’s topline benefitted from the steady growth of its top brands Faasos and Behrouz Biryani, which together are expected to contribute ?220 crore to the overall revenue in FY19. Of the 30,000 orders that the Sequoia Capital and Lightbox Ventures-backed firm clocks daily, over half are driven by the Faasos brand.
A multi-brand strategy built out of an infrastructure that houses almost 175 internet kitchens across 12 cities in India means the firm is able to keep a cap on capital expenditure and scale as per product market fit and assessment — a factor that Faasos CEO Jaydeep Barman attributes as key to the success of its brands.
“We test new brands with limited locations within our existing kitchens. We only scale those brands that we know are being liked by users and where economics are working. The good thing is that our kitchens become profitable in the second month itself and so we will be profitable by FY19-end at an EBITDA level,” Barman told ET.
This has led 18-month-old Behrouz Biryani to become the world’s fastest brand to reach the Rs 100 crore revenue mark. With an average order value that is double that of Faasos, Behrouz Biryani is likely to overtake Faasos and become the biggest brand for Faasos Food Services eventually, given the large category it caters to.
This strategy is key to Faasos’ international expansion strategy, where it looks to replicate its India success in its top brands Faasos and Behrouz globally, even as it shifts the focus to newer brands in India.
“In every sector globally, like hospitality, ride-hailing, etc., an internet company has become the most-valuable company taking over from its offline peers. But in restaurants, globally it is still McDonald’s. As the world’s largest multi-brand cloud kitchen company, this is what we are trying to change by creating restaurants on the internet,” said Barman.