For Prerna Kalra, it was a constant challenge to carry home-cooked meals to work every day, thanks to her busy schedule. “I barely had time to cook breakfast or lunch, and would find myself craving for fresh home-cooked food. Food delivery simply got tiresome, expensive, and just didn’t match my schedule between meetings,” says Prerna.
During one of her work visits to China, she came across vending machines that dispensed almost every kind of fresh food item - from fruits to momos and more. Inspired by this, Prerna started Daalchini along with Vidya B, her colleague from Paytm, in August 2017.
The Delhi-based startup provides instant, affordable, and healthy home-cooked food to professionals through its IoT-enabled phygital (physical and digital) vending machines.
Starting with two smart vending machines back in April 2018 in Delhi-NCR, it has now set up over 140 machines in office spaces, hospitals, hostels, etc., across the city to provide healthy and affordable home-food instantly. Since its inception, it claims it has a steady increase in the number of orders per month. It gets more than 7,000 orders per day, and is seeing more than 15 percent growth month-on-month.
The startup is currently present in Delhi-NCR and Chandigarh, and aims to expand its business in these cities first and later add newer geographies.
[Funding alert] Artha Venture Fund leads investment of Rs 3.5 Cr in foodtech startup Daalchini
How it all started?
After returning from China, Prerna started doing research on whether it was possible to establish food kiosks in India. She realised that despite having 3,500 home-tiffin services in Delhi, home food wasn’t easily available to conscious consumers. The logistics infrastructure of these tiffin services was not in place to cater to the large demand.
“Their lack of affordable distribution channels doubles the final cost to the end customer. While customers are willing to pay this additional cost for restaurant food, they are unwilling to do so for home cooked meals, which meets their daily nutrition requirements,” says Prerna.
“I could clearly see a gap of Rs 40 on each delivery cost, and 40 minutes of delivery time, which was not acceptable when looking for the daily tiffin needs of the customers,” she says.
The food process
A typical day of home-chefs working for Daalchini starts at around three in the morning. They prepare fresh home food daily with the prescribed recipes and ingredients, and also ensure it meets the food safety standards on which they have been trained.
The food prepared is then chilled, packed, and transported to the respective kiosks by the distribution force through bikes and vans.
“Our distribution force refills the vending machine twice a day - in the morning before breakfast and in the afternoon to meet the demand of the customers,” says Prerna.
Daalchini claims it is bridging the demand-supply gap for home-cooked food that is instantly available and healthy – a gap that food delivery apps, tiffin services, etc., are unable to fulfill.
Daalchini’s quick bites are priced at Rs 34 and meal combos cost up to Rs 79. Other packed snacks and beverage items are in the Rs 10 to Rs 99 range. The average order value is around Rs 29.
The startup has raised Rs 3.5 crore in Seed round from Artha Venture Fund, and few angels like Amit Lakhoitia, ex-Paytm, ex-Tokopedia, and Anand Ladsariya, MD, Everest Flavours.
Prerna knew very well from the beginning that fresh food from an unmanned kiosk would be both a tech and operation-intensive business.
“I started discussing it with few people around, and Vidya got the idea. As both of us came from product, technology, and operations background, we knew we would need someone to bring food expertise on our side,” says Prerna.
More than technology, they also knew they had to build a strong distribution play. “Hence, we on-boarded a good business development person early on even before we joined Daalchini full-time,” says Prerna. The startup has around 150 people as part of the team.
The next step was to build the tech and Internet of Things (IoT) for the unmanned kiosks. The platform now works on the app, kiosks, and the supply chain.
Through Daalchini Kiosk app, users can browse the menu at the kiosk, make digital payments through mobile wallets, and share their feedback as well. Users can also discover the nearby machines, browse the products in the machine, and book them after making payments through the app. The Daalchini kiosks also come with a heating zone and serve like a 24*7 cafe.
“Our technology starts from the order projection for next day and posting the same to our partners. Daalchini has also built a unique supply chain model backed by home-chefs to supply fresh food specially made for vending machines,” says Prerna.
While there are no dearth of software and app developers in India, to find an experienced IoT solution developer was a hard nut to crack for the founding team.
A vending machine for fresh food
Since traditional vending machines have had only snack items like chips, coca cola, candies, cookies, cakes, coffee, and chocolates, the team needed a major breakthrough tech that could convert it into a smart vending machine.
There is a partner app for the distribution force which helps them with route plan, their next pickup schedule, as well as offers troubleshooting support to the vending machines. The real-time inventory and status of the vending machine is tracked through the IoT device to streamline their refilling operations.
“Our focus has always been to make these components deep tech-driven,” says Prerna.
Building the home chef team
The next challenge came in the form of home-chefs. “Ascertaining the quality was the biggest challenge while working with home-chefs. We started preparing our own checklist along with consultants and food-experts to find what it takes to convert a kitchen at home to a professional and certified kitchen,” says Prerna.
It was then they on-boarded their first home-chef, Neeta Ji. Fifty-year-old Neeta had been running tiffin services for over 25 years in Noida, but did not have appropriate FSSAI licence, or rather was unaware of the same.
“We helped them get all the licenses, got their kitchen audited and fully compliant. We still have them as one of our suppliers for three to four cohorts of the vending machine every day. This became our bible and rule-book while on-boarding home-chefs,” says Prerna.
Later, they onboarded 15 more such cloud kitchens, each supplying to 8-20 vending machines, and the same checklist was followed. “We now have an auditor to help with these home-chefs,” she says.
The startup launched operations in Chandigarh in October this year.
Growing the cloud kitchens
To cater to the requirement of three to four home chefs for eight to 20 vending machines, Daalchini has 16 cloud kitchens in Delhi, nine of them being run by women entrepreneurs.
“These were tiffin services in the past, serving 15-50 tiffins per day from their home kitchen. We helped them scale, and now they are supplying to over 200 units,” Prerna says.
“Our team visits at least five kitchens before onboarding one. A prescribed checklist is first submitted by our team, after which we help these home-chefs on areas where they need help to become fully compliant. Some of our partners have grown from making Rs 1,000 per day to Rs 10,000 per day as well,” explains Prerna.
The partners are shortlisted basis a detailed checklist filled by the person visiting the tiffin service. They are then selected basis the score of the checklist. In case a partner does not have appropriate FSSAI licence, and does not adhere to the regulatory norms, we guide them in getting the same through some professional agencies. The criteria is the kitchen must be clean and hygienic, and it should be run by a professional chef or women entrepreneurs.
“Our regular training also includes improving their entrepreneurial skills, which will help them in their business outside Daalchini. They learn to reduce wastage and improve their margins. We help them with professional training to boost their confidence too,” adds Prerna.
Daalchini is now looking to have over 6,000 vending machines in the next two and half years.
(Edited by Megha Reddy)
Want to make your startup journey smooth? YS Education brings a comprehensive Funding and Startup Course. Learn from India's top investors and entrepreneurs. Click here to know more.