[Startup Bharat] Meet IIT aspirants turned college dropouts who are now running a foodtech startup in Kota
Abhishek Srivastava and Sameep Agarwal are tapping the unorganised QSR sector in Kota with their startup EatXD, which is a cloud-kitchen with multiple brands under its umbrella.
Rajasthan's Tier II city Kota, known as the Mecca for IIT and medical aspirants, welcomes 1.5 million students every year who come to prepare for JEE and other entrance tests. Life-sized banners and hoardings of coaching classes line the roads, and at any given time, you will see a group of students pottering about in the city.
In 2014, two friends from Purulia, a small town in West Bengal, travelled all the way to Kota with the same aspiration. Abhishek Srivastava (22) and Sameep Agarwal (21) were two of the many IIT aspirants but have now ended up as entrepreneurs in the same city.
The duo founded EatXD Food Services, a venture in the quick service restaurant (QSR) segment in December 2017. Initially serving only North Indian cuisine and biryani, EatXD soon rolled out brands ‘Hotpan Pizza’, ‘Mojo Burger’, and ‘Iceberg Milkshakes’ under its umbrella in 2018.
Food keeps students going through all the late night study sessions and revisions. Kota hosts as many student messes as the number of coaching classes in the city. But it is a strength by numbers, not by variety, with most messes dishing out the usual fare - roti, rice, dal, and sabzi.
Bored by the food, and sure that others like them would be feeling the same way, Abhishek and Sameep returned to the city to spice it up. Abhishek adds,
"We came to Kota for JEE preparation and knew that the demand for a food brand was quite high."
Tapping this unorganised QSR segment, EatXD started operations in April 2018, targeting students just like them, who come to the city with high hopes.
From drop-outs to entrepreneurs
Unable to crack the JEE test, Abhishek and Sameep went to Bengaluru for their graduation. Abhishek started BCA in Jain University while Sameep went on to join BTech in Computer Software Engineering from Sapthagiri College of Engineering. But this did not excite the duo.
"The lack of interesting sessions and avenues for creative learning made us drop out of college," Abhishek says.
While still in Bengaluru, they noticed the current trend in foodtech: major startups in the sector concentrated their efforts in Tier I markets. This leaves Tier II and III cities highly unorganised, with only international food brands dominating those markets.
Since they lived in Kota for two years, knew their way around the place, and the expectations and demands students there had, it made sense for Abhishek and Sameep to start up there.
EatXD operates four brands under the same 300 sq ft cloud kitchen.
"This helps us minimise the operating cost, and the perception that a pizza brand cannot serve good biryani," Abhishek explains.
They source the raw materials from food processing plants in Delhi and Indore, and weigh each ingredient before they hit the pan. The co-founder adds, "This ensures the same taste and experience every time a customer orders from us.
The menu ranges between Rs 65 for wraps, and goes up to Rs 480 for the non-vegetarian combo. Besides having their own website from where customers can place orders, EatXD has also partnered with Zomato and Swiggy for delivery services. It also has three delivery partners of its own, seven cooks, and one manager.
Small towns, big hopes
Starting up was no cakewalk for the duo. Abhishek says,
"We faced the challenge of getting hold of the initial investment to set up the kitchen."
They approached IDBI Bank and received support under the Pradhan Manti MUDRA Yojana (PMMY) and bootstrapped EatXD with an initial investment of Rs 10 lakh. The startup recently received approval from the Government of Rajasthan as well, for a loan of Rs 8 lakh.
Their next challenge was taking the brand to the masses. "We did not have the marketing budget, so we started with social media marketing, and pamphlet distribution to help us grow steadily," Abhishek adds.
Recalling a memorable experience, he says that they once delivered a birthday order for a Class 12 student, comprising 70 wraps, within two hours.
"Every member of the staff, including us founders, prepared the wraps, and we also sent a complimentary cake," he recalls.
The student, Chirag, tells YourStory :
"EatXD never disappoints me. I have tried almost all their dishes and their quick delivery and packaging are brilliant."
Rising numbers, one dish at a time
Initially serving 150 orders a month, EatXD now serve up to 150 orders each day, with 80 percent customer retention rate. They have grown their revenues from Rs 20,000 a month, initially, to Rs 6 lakh a month.
"We are currently growing at a rate of 150 percent on quarter," Abhishek says. Their target is to clock Rs 1.5 crore this financial year.
A report by Statista states that the Indian F&B industry market size is estimated to reach $46 billion by 2020. EatXD works just like a Fassos or Box8. With none of these being present in Kota, EatXD directly competes with the local restaurants and food joints in the city.
"Currently, the market in Kota is unorganised with only foreign food brands like Domino's, and McDonald's," says Abhishek.
The founders are planning to raise funds this financial year and expand to other cities, including Jodhpur, Indore, and Jaipur. EatXD is planning to start a subscription model soon and hopes to enter the healthy food segment as well.
Want to make your startup journey smooth? YS Education brings a comprehensive Funding Course, where you also get a chance to pitch your business plan to top investors. Click here to know more.