Ghost Kitchens acquires majority stake in QSR Brands India and Eathos Group to accelerate their growth

Ghost Kitchens will provide the capital, infrastructure, backend, marketing, supply chain, and warehousing mentorship to the two companies.

Accelerator and growth investment firm Ghost Kitchens led by Karan Tanna bought a majority stake in cloud kitchen companies QSR Brands India and Eathos Group for an undisclosed sum. QSR is valued at $5.5 million, while Eathos Group is valued at $2.2 million. 

Ghost Kitchens will provide the capital, infrastructure, backend, marketing, supply chain, and warehousing mentorship to the two companies. GK also plans to scale them up across multiple geographies over the next few months.

Founder of Cloud Kitchens, Karan Tanna

“The unit economics of cloud kitchen businesses can only be sustainable if the overhead expenses are drastically cut down. We are creating an infrastructure that can support multiple companies to scale quickly without reinventing the wheel,” said Karan Tanna, CEO and Co-founder, Ghost Kitchens.

QSR Brands India, led by Manoj Kudtarkar has popular brands like New York Waffles and Dinges, Hakka Makka, Starboy Pizza and Shakes, and Jenny’s Homemade Brownies, among a portfolio of 15 brands and over 120 point-of-sales (PoS), with presence in cities like Mumbai, Pune, Ahmedabad, Delhi, and Kolkata. With the new investment, the company plans to launch 150 point-of-sales by the end of 2020.

Eathos Group is a chef-driven cloud kitchen company owned by Sabbir Ansari. Eathos has a total of six chefs and has brands like Biryani Hazir Ho, Madrasam, Maa ki Khichdi, Bolo Tara Rara, and more under its portfolio, with over 20 point-of-sales in Mumbai and Lucknow. The startup is planning to launch 100+ point-of-sales in 2020, and expand it’s operations to other cities like Delhi, Ahmedabad, Bengaluru, and penetrate further in Mumbai, by opening new kitchens.

"We have scaled up to over 120 internet restaurants in the last few months, and have realised the challenges around unit-level economics and scalability in the cloud kitchen business. Partnering with Ghost Kitchens is a very strategic decision for us, as that will not only bring growth capital to double our point-of-sales but will also bring in a lot of synergies to exploit the economy of scale and cut down our costs at the unit and corporate level. Its experience to scale across geographies will help us reach our goals faster and in a sustainable model,” Manoj Kudtarkar, Founder of QSR Brands India said.

Sabbir Ansari, Owner and CEO of Eathos Group added, "Karan is mentoring me for the last few years. Ghost Kitchens’ understanding of 'Real India' in the context of the food business is very hands-on, and that will help us grow in a financially tight model. We want to keep capital per unit as low as possible and minimise the overhead expenses at the corporate level. Our partnership with Ghost Kitchens will help us focus on operations, as we can leverage its strengths to bring the right strategy and capital."

Cloud Kitchens is a delivery-only restaurant model without any dine-in facility or walk-in customers. It heavily relies on self-delivery or through various delivery aggregators. Ghost Kitchens, founded in June last year by food services business entrepreneur Karan Tanna, is an investment and incubation company for startups in the cloud kitchen segment. The startup is largely self-funded by Tanna.

It plans to have a portfolio of at least 20 delivery partner-oriented companies, and have a presence across 12 cities and run about 300 internet restaurants by the end of 2020.

(Edited by Suman Singh)