Deepinder Goyal is ordering food from this Delhi-based startup, and no it’s not Zomato
Do you know what is common between Hike Founder Kavin Bharti Mittal, Zomato Founders Deepinder Goyal and Pankaj Chaddha, Chaayos Founder Nitin Saluja, cricketer Virat Kohli’s brother Vikas Kohli, YouTuber Kusha Kapila, Singer Aastha Gill, and UrbanClap Founder Abhiraj Bhal? It's the place they order food from: Delhi-based cloud kitchen startup.
Launched in October 2016 by a young chef Anshu Raj (now 26), Caterspoint is a cloud kitchen that delivers nutritious, innovative, low calorie, and tasty food to its customers.
“We are inspired by the popular brand Domino’s for the convenience and consistency in the delivery model, but in a little more to the healthy side and daily habits. It has helped clients to have convenient, fresh, and healthy food at any given point of time, on-demand,” says Anshu Raj, Founder and Director, Caterspoint.
The foodtech startup designs its menu by including the forgotten ingredients in our mother’s recipes like sago (sabudana), poha, upma, curd rice, custard, kheer, and many more. The Caterspoint menu covers about 260 items that have breakfast, lunch, snacks, dinner, desserts, refreshing beverages, and exotic options like porridges, oatmeal, a variety of salads, and sandwiches.
Anshu says every specification is shared with the clients so that they know what they are consuming. “All the ingredients are mentioned with appropriate sides and accompaniments,” he adds.
“In a world of various kinds of food, Caterspoint brings out options that are made up of high-quality ingredients and prepared with proper hygiene kept in mind,” Anshu says.
At present, Caterspoint operates from four kitchens across Gurugram and Delhi, with the mother kitchen being located at DLF Phase 3, Gurugram, and has already catered a million orders in the last three years.
Caterspoint’s clientele list includes Kavin Bharti Mittal, who likes to order salads and poha, and Zomato Founders Deepinder Goyal and Pankaj Chaddha, who are fond of pasta and snacks. Other clients include Virat Kohli’s brother Vikas Kohli, YouTuber Kusha Kapila, Indian pop singer Aastha Gill, UrbanClap co-founders Varun Khaitan and Abhiraj Bhal, and India Accelerator Founder Ashish Bhatia.
“Also, we have a lot of CEOs, American, and Japanese clients from corporate sectors that are regular and frequent with us. Salads and sandwiches are very common and in demand,” Anshu adds.
Anshu started his career as a chef with brands like Oberoi and ITC. Anshu says he always wanted to do something more, which made him quit his ‘five-start’ job to join a startup called Frsh in 2015, which also operates in a similar model and delivers healthy food.
Anshu looked after the entire operations in the capacity of Chief Operating Officer (COO), during which he observed that people wish to have comfort hygiene food in a cost-efficient manner. “There are innumerable options available, but only a few have been successful in this space due to difficult propositions in scaling, unlike technology,” says Anshu.
He says that he observed a gap in the mid-segment innovative food where people want old-age food in a new approach.
“The segment gap has been majorly captured by two-three key players but still waste space is unconquered. Other than a liking for experimenting and change in taste, the consumers are exploring food options due to reasons like lack of consistency, hygiene, and long prep time,” Anshu says.
Such regular consumer issues gave birth to Caterspoint, where the team has been working to ensure consistent hygiene, and delivering quality food in an exceptional presentable manner, says Anshu.
The startup launched its operations in Gurugram, where the head office is currently located, and spread to prime areas of Delhi like Sohna Road, Malviya Nagar, and Dwarka by 2019. The food items at Caterspoint starts from Rs 129 and goes up to a maximum of Rs 499. The average order value is Rs 450 or more, he says.
Market and competition
Since the foodtech market is a very competitive market and industries are competing with each other at a fast pace, Anshu claims to have built a separate market for Caterspoint in the last three years. The first factor, he says, is the innovative menu and the hygiene it maintains.
“Secondly, the streamlined backend support for all the outlets. This means that we have a centralised team for supply of raw materials, an audit team, and a training team. This helps us in modifying and implementing the standard operating procedures (SOPs) for smooth functioning,” he adds.
Anshu believes that in the coming years, small players in the market will not be able to cope up with the food trends that will change with time. And, Caterspoint has already created a market that is going to expand in the future.
“The future market will demand hygiene assured and top-notch quality food. This will spread like a fire in the jungle as people are now becoming more health-conscious,” he adds.
Caterspoint operates on a cloud kitchen-like business model. A cloud kitchen is a restaurant that has no physical space and no dine-in or takeaway facility, as it does not exist as a restaurant of any sort. It relies entirely on third-party integrations or home delivery orders placed on a call, website, or via an app.
Anshu points out that cloud kitchens have been around for a while now, as companies save a lot on rent and marketing – the two biggest cost centres for a restaurant. “Only what matters is your food quality, packaging, and timely delivery,” he adds.
Caterspoint operates a dark, as well as a cloud kitchen model. The independent cloud kitchen model is set up in DLF Phase 3, Gurugram, and Malviya Nagar, and has a single kitchen used for bulk orders. These two kitchens are also registered on Zomato, where orders are received online.
The third-party infrastructure service business model is a dark kitchen model, where the company uses third-party access kitchen like the ones the startup operates in Dwarka and Sohna Road.
“Cloud kitchens are being considered as a smarter way to run the online food delivery business that has a blank space to reach successful profit margins. This model provides flexibility to the business,” Anshu explains.
To date, Caterspoint has more than 4,000 positive reviews on Zomato and is the most searched home delivery restaurant on the food ordering platform. In terms of business, Caterspoint has served one million customers since its inception, and has grown from a monthly GMV of Rs 3 lakh in October 2016 to Rs 45 lakh in December 2019.
“We plan to clock $950,000 in revenue in 2019-2020, and further expect average yearly growth between 25 to 30 percent over the next two years, Anshu adds. The startup’s revenue for the current financial year stands at Rs 6 crore.
In terms of profitability, the chef says that the company is targeting unit-level profitability. “Our first centre became profitable in FY18, while new centres are almost becoming self-sustaining,” the founder says.
At present, Anshu says, the focus is to build a business based on the current kitchens. “Assuming there will be no expansion, we plan to be profitable (with four centres) sitting at a healthy EBITA of 12-15 percent margin by Q1 of 2021,” the founder adds.
Funding and plans
So far, the startup has been bootstrapped with Anshu’s savings of Rs 30 lakh. “Unlike a traditional business, each unit has self-sustained and supported the next unit. And this is how the business has built on a self-funded manner, till now – by putting earnings into business to fuel growth,” Anshu explains. Besides that, the startup has also raised a debt of Rs 75 lakh from former Haldiram Group VP, Manu Grover.
Currently, the startup is seeking external funding of $1 million to work on the backend technical gaps, retain the right talent, and to scale its business. Caterspoint has around 60 employees.
In the next 24 months, the startup wants to start catering to the entire Delhi-NCR market and then expand to Chandigarh and Bengaluru.
“The market and conversion rate in these cities is high. As per our surveys and market research, we found that people prefer online ordering and deliveries very convenient here. The ratios of clients who love to experiment with food are comparatively higher,” Anshu adds.
He says the mission in the next five years is to become one of the top five best foodtech startups in India.
(Edited by Suman Singh)