[Startup Bharat] This startup is giving a tough fight to Swiggy and Zomato in Kozhikode
Crisp raw banana cutlets, shrimp in coconut curry, appam and beef ghee roast – the very name of these mouth-watering delicacies form a picture of Kerala in every foodie’s mind. And where are these best experienced than in Kozhikode – the food capital of God’s own country.
With such enticing food to offer, the opportunity for food delivery startups are many.
Despite the presence of food delivery startups like Swiggy and Zomato, Potafo, a food delivery app, is giving these unicorns a run for their money.
Knowing the pulse of the city, four friends from Kozhikode - Magdy Ashraf, Muhammed Rashad, Vyashakh Prasanth, and Adul Haseed Moosa, set out on their entrepreneurial journey to start their own food delivery startup, Potafo, in 2017.
The startup has tied-up with Kerala Hotel and Restaurant Association (KHRA) to have the best restaurants in the city as their exclusive partners. According to Magdy, restaurants under the KHRA deny services to their competitors – Swiggy and Zomato.
At present, the startup claims to have more than 50,000 users registered on its platform.
For the love of food
Twenty-six-year-old Magdy, Muhammed Rashad, and Vyashakh Prasanth studied together at Sree Gokulam Public School, Kozhikode.
“We are very proud of the food culture in Kozhikode and have always tried out new restaurants in the city,” says Magdy.
Once done with his BTech in Mechanical Engineering, Magdy approached his batchmates and common friend Adul Haseeb Moosa (26), with the idea of starting up in the food delivery space.
The name Potafo is derived from the most celebrated dish in France – Pot-au-feu, which is beef stew. “We wanted to make it simple and catchy, hence made it Potafo,” Magdy, who handles the operations and technology, says.
Rashad, a BCom student from Calicut University, worked as a sales and exports manager in UAE, before starting Potafo and managing the delivery fleet. Vyshakh, also a BCom student from SRM Institute of Arts and Science, joined Potafo right after college and now handles Human Resources. Haseeb is an electronics engineer, and worked as a production line supervisor, before starting Potafo. He handles marketing and business development.
Aditya Raveendran and Abdul Mukthadir manage finance and sales departments, respectively.
The food business
Like most food delivery startups, Potafo has both Android and iOS applications and a website through which customers can place their orders.
“We bring in orders for the restaurant and also deliver it for them,” says Magdy.
Potafo, which works on a contract model, has more than 200 delivery partners who work on a contract basis. The delivery personnel bring in their own vehicle for delivery, and the startup provides them with a delivery bag.
Potafo has currently partnered with more than 150 restaurants, and as some of Kozhikode's leading restaurants and cafes on its list, including Paragon, Hotel Rahmath, Sixth Avenue, Down Town, Bombay Hotel, and Topform Restaurant, among others.
The startup collects up to 15 percent commission per order from restaurant. On the other hand, they charge Rs 20 from the customer, as delivery fee. Currently operational across Kozhikode, Potafo plans to expand to other major cities in Kerala after raising funds.
According to Magdy, Potafo served up to 500 orders each day, with an average cart size of Rs 360. The startup says it has been recording up to 15 percent growth every month since inception.
A Potafo delivery executive
A report by RedSeer suggests that the overall food delivery market in India was valued at $15 billion in 2016, and has been projected to grow at a CAGR of 24 percent to reach $26 billion in 2020.
While giants like Zomato and Swiggy have already captured a large share of the market, startups from Tier II and III cities, including Nativ Chefs, FoodXD, and HungerBay are trying their luck to create their brands.
“We are very connected with the end customers. Initially, we made deliveries by ourselves at customer’s doorsteps. Their smile is our biggest reward,” says Magdy.
Recalling a memorable incident, he adds that the founders personally visited few customers who were unable to understand how the app worked, and gave them a demo.
Initially bootstrapped with Rs 1 lakh, Potafo is now actively looking to raise funds.
“We are looking for funding to speed things up,” Magdy says.
Once they cover all of Kerala, Potafo plans to expand to other South Indian cities, including Bengaluru.
(Edited by Megha Reddy)