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A mixed platter for REBEL Foods

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REBEL Foods – the self-proclaimed, ‘World’s Largest Internet Restaurant Company’ sees revenues double but losses widen.

Here is the good news:

REBEL Foods has seen an incredible 2X+ growth in outlet count. A little over an year ago, Jaydeep Burman, Co-founder/CEO, REBEL Foods, had blogged “Today, we can safely say we are the world’s largest delivery only/ internet restaurant company … At 1100+ individual internet restaurants, in 15 Indian cities, we have indeed come a long way in the last 24 months.” And today REBEL Foods operates 2,100 internet restaurants in 28 cities in India, and has 275 cloud kitchens across three countries.

And, here is the bad:

REBEL Foods also saw its net loss in  financial year 2018-19 widen by around 75 per cent to Rs.130.64 crore. This is up from the Rs 74.44 crore loss it reported in FY2017-18. Its total revenue, however, more than doubled to Rs 310.37 crore, from a topline of Rs 149.05 crore in FY2017-18.

The loss was largely because the company’s expenses rose to Rs.441 crore. Of these, the cost of materials consumed rose 105 per cent to Rs 144 crore, and employee benefit expenses recorded a 45% growth to reach Rs. 92.27 crores. The good news was that the cost of material as a percentage of revenue from sales maintained stability, and the cost of employee expenses actually showed a healthy 12+percentage reduction from its previous burden upon sales revenue.

Concerns will however arise about its continued dependence on other food aggregators which saw commission paid to them increase 4X in pure monetary terms and 2X as a share of revenue. There was also a 3X increase in advertising, promotion, marketing, and miscellaneous expenses (Rs.32.5 crores to Rs.92.5 crores), which may, of course, be expected from a player on an aggressive expansion route, having just recently reinvented itself and high on the joy of grabbing the title of the World’s Largest Internet Restaurant Company.


Zomato has also reported a loss of $294 million (Rs 2,035 crore) with a 3X revenue growth to $206 million (Rs.1,426 crore) during FY19. The company had posted $68-million (Rs.470 crores) revenues in the previous fiscal. Zomato has however clearly said that its total cost increased 6.5X to $500 million because of marketing investments which will bear fruit in FY20 and beyond. Swiggy is yet to file its financials for the year ending March 2019. Uber has also reportedly projected higher operating losses of Rs.2,197 crore in UberEats for the five month period – August to December 2019.

Our take:

While at one end, the words of Dineout, CoFounder, Vivek Kapoor at a recent startup convention – “One thing I tell everyone is that if you think too much or if you dissect everything … you will find a thousand reasons to not do it. There is only one reason to do it, which is because you want to make it happen,” – do ring very true for an organisation of believers like REBEL Foods; and now that each of its brands already have Great Story Telling at their core (check out the fabulous Behroz Biryani brand stories on the brand webpage); – the company may do well to keep one eye open on the deeper aspects of cost of capital – losing your own story.

REBEL Foods’ CEO Jaydeep Burman who believes in “forever challenging the status quo, (and) never saying “that hasn’t been done before, always questioning main-stream,” should welcome the challenge of managing both multiple-X outlet growth and achieving profitability. Yes, that would indeed be what Jaydeep says is “the fruit of our contrarian approach.”

More about REBEL Foods:

REBEL Foods, which was originally incorporated as Faasos Food Services in 2011, is aggressively expanding its presence in Southeast Asian and the Middle-Eastern markets. At present, it has 275 cloud kitchens across three countries. In India, it operates in 28 cities and has 2,100 internet restaurants.

It owns popular brands such as Faasos, Behrouz Biriyani, Lunch Box, Oven Story, Mandarin Oak, Sweet Truth, Firangi Bake, The Good Bowl, The 500 Calorie Project, Navarasam, and Slay Coffee. Rebel Foods claims to receive almost 12.5 lac orders a month.

The 9-year-old company had raised $125 million (Rs.875 Crores) in August this year, in a fresh round of funding led by New York-based technology-focused hedge fund Coatue Management. The Series-D round of funding took Rebel Food’s valuation at $500-525 million. The company’s existing investors include Evolvence, a UAE-based private equity fund; Sistema Asia Ventures; Sequoia Capital and Lightbox Ventures.

Prior to that in March 2019 had reported that the company has raised Rs 110.66 crore in fresh funding from existing investors, including Lightbox Ventures II, Lightbox Expansion Fund and Sequoia Capital India Trust. And just recently Travis Kalanick’s City Storage Systems had also reportedly taken a small stake in Rebel Foods. 


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