
Cloud kitchen business
Can someone share their business stories of cloud kitchen. Is it profitable? How much initial investment required? How did you chose what to sell among lot of varieties available?
Six years ago, I was making 12 salads a day in a basement kitchen in Galleria ggn, barely covering my costs. Last month, we served our 5 millionth order across 78 cloud kitchens. But today, I'm writing this because everything I built is starting to crumble.
Someone has already spoken about their similar journey of selling on platforms here before. Just like them my story isn't about success - it's about how scaling too fast on borrowed money and platform dependency can turn your dream into a literal nightmare.
Here's how it all went down:
Back in 2018, I was working in big tech in Gurgaon, ordering lunch daily, and getting frustrated with the lack of healthy options. Every salad was either wilted lettuce drowning in mayo or overpriced fancy leaves that didn't fill you up. I got a cook and taught her how to make a good salad - she was absolutely brilliant, so good that coworkers began offering to pay for them.
The first kitchen:
The unit economics were terrible to say the least:
But something clicked. People loved our portions and fresh ingredients. Reviews started pouring in about how we were different - no wilted vegetables, no dry chicken, no drowning in dressings.
The climb (2019-2020)
Within six months:
The unit economics improved with scale:
Then COVID hit. While others shut down, we exploded:
In 2021, raised our first round - $5M+ at a $xxM valuation. The pitch was simple: "Healthy food at scale, targeting 100 kitchens across 8 cities."
The expansion began:
Our peak numbers looked insane:
But here's what was really happening:
The hidden costs of scale:
The real nightmare began when:
Where we are today:
The lessons I learned:
Looking back, I should have stopped at 8-10 kitchens. We were profitable, manageable, and most importantly, happy. The food was better, the team was closer, and we actually knew our customers' names.
I'm writing this from our Bangalore central kitchen at 3 AM, looking at next month's projections, and for the first time in 6 years, I'm scared. Not just for my business, but for everyone rushing to scale without questioning if they should.
To every entrepreneur (esp F&B founders) reading this: Sometimes the best way to build something big is to stay small enough to survive. The platforms aren't going anywhere, and neither is our dependency on them.
P.S. - My first kitchen in Galleria? Still profitable, still doing 300 orders a day, still has the original team (my ggn cook leads our pan India kitchen operations now!). Maybe that's trying to tell me something.
Also for the love of god, before another person asks "Why did you not try ONDC?"
Everyone talks about ONDC like it's the savior for businesses like mine. We jumped on it the moment we could - invested in integration, rebuilt our tech stack, sab kuch kar liya.
Six months in, here's the reality:
The hard truth? Building direct ordering channels is a pipe dream. Even massive brands like Truffles and Social get 85-90% of their delivery orders from platforms. I've seen their numbers - we're all in the same boat.
Why? Because no customer wants to:
We tried everything:
Result? Barely moved the needle. People want convenience more than discounts. They trust platforms more than individual brands. The harsh reality is that Swiggy and Zomato aren't just delivery apps anymore - they're the default "food button" on people's phones.
I don't have much idea about unit economics and entrepreneurship. Still I would mention 2 approaches that come to my mind.
Why not use a whatsapp bot to enable customers to order directly? That way customers don't have to download any app
Wonderful post. Thanks for writing such a detailed post.
Scaling too fast is often leads to unsustainable unit economics. Same thing happens with Dunzo too.
Greediness killed your dream.
Ok sir, thanks for your valuable inputs
I disagree with you, anyone would want to grow in a business. Scaling up may never be the right growth in this case. Variables like, platform margins, ingredient cost, manpower etc. The focus on scalability in this case resulted in variables dragging the growth down. A business at times is just an idea away from turning around or a dead horse. I would thank the founder for sharing the learning and hope someone is able to learn and able to implement based on the learnings shared here.
This is amazing. Instead of making your own app, did you thought about dining ?
I still think scale could be achieved if you have moved at medium pace and not super quick. Dunno if it was done bc you had funding & investor pressure.
I won't call it investor pressure, it's what felt right back then
The sad part about all these learnings is that it's all in retrospect - not something unique to me or my company, it's how these things work. The best we can do is run the company better than how you ran it last quarter :)
Can you elaborate a bit on wastages? How does it occur? Also, do you think had you not taken external funding, you would have taken a slower but profitable route?
Relying on Swiggy etc. is also a huge challenge for any food delivery business. Going offline is a solution but isn't suitable for some businesses and not easy to crack. Tough !!
Nevertheless, Fascinating insights, and waiting for you to write a turnaround story soon 😀
Let me break down the wastage reality. At 8 kitchens, wastage was 8% - about Rs. 4,000 daily. At 78 kitchens, it hit 18%.
The math (sharing a high level example): Each kitchen needs minimum 5kg lettuce prep = 390kg total Wastage at 18% = 70kg daily At Rs. 120/kg = Rs. 8,400 gone, just on lettuce
Premium ingredients hit harder. Avocados: 2-day perfect window, Rs. 140/piece. Every kitchen wastes 2-3 daily = Rs. 21,840 lost across all kitchens.
The real issue wasn't growth - it was that we lost the tight inventory control we had in our first few kitchens where wastage was just 4% because we knew our patterns cold; the problems came with scale.
Richest guy : don't become rich, money isn't anything This guy with 14ksalads / day: don't start business A guy ruined in love: never love focus on career. Guy ruined in career: it's all a trap.
"Fk y'all" is what I would say... 🥳✌🏻
I never said don’t start a business, I’m saying cloud kitchens aren’t sustainable - don’t start there :)
Can someone share their business stories of cloud kitchen. Is it profitable? How much initial investment required? How did you chose what to sell among lot of varieties available?
Dunzo Taskmo Frontrow
Founders are not shitposting on the socials, so that’s good I think 😅
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