Mumbai: Rebel Foods, the operator of dark kitchens under the Faasos, Behrouz Biryani, Mandarin Oak and Oven Story brands, is set to invest ₹100 crore to ₹200 crore to open more such facilities and expand its food court format EatSure as dining out makes a comeback after the pandemic.
“In the next one and a half years, we expect to add 100 stores. A lot of new store expansion will happen under the EatSure format,” said Sagar Kochhar, co-founder of Rebel Foods.
The move comes as Mumbai-based Rebel Foods eyes a stock market listing in FY26. It signals the company’s offline expansion as the euphoria over cloud kitchens that picked up during the pandemic gives way to in-store dining.
On average, the cost of establishing one EatSure store, including integration of a cloud kitchen, ranges from ₹1 crore to ₹2 crore. The company said it doesn’t need to raise funds for the expansion – it did not elaborate.
Rebel operates over 450 cloud kitchens across 75 cities in India, the Middle East and North Africa, Indonesia, and the UK. It runs 150 outlets for fast-food chain Wendy’s in India. Its food court format currently has eight outlets.
“From a consumer standpoint, we are now solving for a need gap, which is the reason why we are coming back offline. We also think that dining is not going anywhere. The offline use-case is not going to go away. Consumers will find reasons and opportunities to eat out,” Kochhar said. EatSure kitchens will also be used to service online orders, he said.
The popularity of cloud kitchens jumped during the pandemic, registering year-on-year growth of 40% from 2019 to 2023. However, consumers returned to eating out more, driven by the availability of more options and a general uptick in socialising. Kochhar said the company is trying to capitalise on the return-to-offline formats.
Delivery vs. dining in
India’s food services market is set to almost double to ₹9 trillion by the end of the decade from ₹5.5 trillion on the back of an expanding customer base, growing consumption, and a jump in the number of new eateries, according to a report released by Bain & Company and food aggregator Swiggy on Wednesday.
Additionally, online food delivery is expected to expand faster at a compounded annual growth rate of 18%, contributing 20% to the overall food services market by 2030, up from 8% currently. While delivery growth rates will outstrip those of dining in over the mid to long term, companies in the business of cloud kitchens also face high take-rates or commissions on account of aggregators.
“In that sense, diversifying into offline restaurants makes sense,” said Karan Taurani, senior VP at Elara Securities. “Although dining-in recovery is not going to be very sharp, delivery growth rates in India will outperform over the medium to long term, but adding up your dining-in also leads to higher operating leverage and drives better profitability.”
Founded in 2011 by Jaydeep Barman and Kallol Banerjee, Rebel Foods competes with large fast-food chains as well as standalone cloud kitchen operators.
The company’s revenue from operations grew 19% to ₹940 crore in FY23 from ₹789.16 crore in the previous fiscal. Its loss widened to ₹670.2 crore in FY23 from ₹520.34 crore in the previous year, according to data sourced from business intelligence platform Tofler.
Kochhar said the company will double down on building its brands and gaining market share, while expanding chains such as Wendy’s. It will add more brands to its launcher platform that allows third-party restaurants to use its cloud kitchens.
“We are also incubating new formats and categories – say fried chicken, which is a big market with one national brand,” he said. The company could list on the stock exchanges in fiscal 2026, he added.
In 2021, Rebel Foods became a unicorn after it raised $175 million in a funding round led by the sovereign wealth fund Qatar Investment Authority at a valuation of $1.4 billion. In April last year, the company secured $9.1 million in a debt funding round from Northern Arc and Stride Ventures.