[Startup Bharat] Ex-Gojek exec teams up with restaurateurs to serve biryani with their Ahmedabad-based cloud kitchen

Have you ever had the misfortune of raving about a restaurant to a friend seeking recommendations only to hear that they were sorely disappointed with the food when they went there? Kapil Mathrani, Rohan Bhatt, and Poojan Thakkar—all self-proclaimed foodies—found this to be quite recurrent when eating out.

Kapil notes that their first visit to a restaurant that claimed to serve the best butter chicken was good, but the taste and experience on the second one were vastly different and left a bad taste in the mouth, quite literally.

On the other hand, where consistency was a given, other issues cropped up. Take local roadside eateries, for example. You could grab a delicious sandwich or a piping hot dosa on the go, but one had to look away when it came to hygiene standards in such establishments.

Makhni Brothers, therefore, happened when these foodies smoked out a gap in the F&B industry, particularly in the restaurants space, of consistently tasty and healthy food whipped up in hygienic conditions.

As soon as they set up their cloud kitchen in Ahmedabad in 2019 to serve comfort food by way of biryani and other Indian specialities, the three friends created HETH, standing for Hygiene, Economy, Taste, Health, which is a standardised format of preparing food through recipes and guidelines that every chef in their cloud kitchen has to follow.

BigSpoon Foods Pvt Ltd, the parent company of Makhni Brothers, has now raised an undisclosed sum in a second seed round from a clutch of investors. The startup is now looking to raise another $100,000 through an angel round, for expansion and growth.

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Firing up the operations

The team first raised a seed round in July 2019, after which Makhni Brothers set up their cloud kitchen in Ahmedabad and hired the core team. Most of the kitchen backend team joined organically from restaurants and hotels that Poojan had worked with.

He and Rohan had worked together in the past on a restaurant design and consultation project, and built a wide network in the F&B industry. They had been planning to start a business together in this space.

Kapil, former Senior Vice President (Business Operations) at Gojek, was moving back to India from Jakarta, and Rohan got in touch with him to share the idea for Makhni Brothers as well as seek counsel.

Today, the startup has 16 employees, including teams for kitchen ops, logistics management, front office, and marketing. Makhni Brothers also onboarded culinary and food consultants to fine tune the menu and preparations, as well as to optimise the cost of goods sold (COGS).

The lure of cloud kitchens

Kapil explains that cloud kitchens have been a new strategy for F&B businesses. Eliminating the fixed costs on infrastructure and utilities, rent, maintenance, and upkeep makes the cloud kitchen a unit economics-positive business model.

 “Makhni Brothers has been profitable from month one, with EBITDA higher than 25 percent. With an average order value of more than Rs 450, the bottomline margins are healthy, and the model is scalable. When the business grows to more than two cloud kitchens in the same city, we will deploy the central kitchen model where main preparation for all kitchens happen centrally to save cost and time,” says Kapil.

Kapil explains that a typical cloud kitchen can be set up and become functional within 45 days, and the fast turnaround renders it an easily scalable model.

“The cost to build a kitchen is anywhere between Rs 12 lakh and Rs 15 lakh. Tech infrastructure is an additional but one-time cost that Makhni Brothers has already invested in across all platforms,” he adds.

Makhni Brothers has developed its own iOS and Android app, website and m-website and has a micro call centre to accept orders and for customer service. The apps come with virtual currency wallets for customer retention and loyalty programmes. Apart from the startup’s in-house platforms, the customer can also order via Zomato, Swiggy and Uber Eats, and have their food delivered from nine in the morning to an hour after midnight, within 25 minutes. Makhni Brothers serve biryani, and North Indian cuisine.

The food is packaged at the cloud kitchen and then optimised for transport. Kapil explains they ensure the cleanliness standards are maintained all through the process.

A future in the cloud

According to a report by Statista, the Indian F&B industry market size is estimated to be $46 billion in 2020. While there are several joints such as Behrouz, Bengaluru-based Potful, Nizam's, Parsa's and the legendary Tunday Kebabi making their presence felt in the biryani section. Other cloud kitchens like Faaso’s, and Ovenstory Pizza, which are focussed on different cuisines as well.

Speaking of their future plans, Kapil says,

“Makhni Brothers plans to scale to 15 kitchens in three cities by mid-2020, 50 kitchens by 2021, and further expand to international markets like Dubai, Singapore, and Toronto which are starved for authentic Indian food. The parent company, BigSpoon Foods, would add more brands under its umbrella specialising in pizza and pasta, healthy bowls, Mediterranean, Tex-Mex, and regional cuisine from the same kitchens.”

(Edited by Evelyn Ratnakumar)

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