Food tech start-up Yumist shuts down; fails to raise funds
Gurugram-based food tech start-up Yumist, which offered home-cooked meals, is shutting down as it failed to raise the kind of capital required to survive in the competitive market. Competing against Zomato and Foodpanda, Yumist delivered food prepared in its own kitchens to customers through a cloud kitchen model. The company, which secured around $3mn in funding, made the announcement in a blog post.
There are external factors one can't really control: Yumist
Yumist said it failed to raise funds but added there were internal and external factors that led to the dead-end. It made mistakes by launching prematurely in a second city (Bengaluru), committing to a high-growth, high-burn model in 2015 because investors wanted, and taking time to find the right business model. Yumist said it recovered fast from the mistakes, "but maybe not too fast."
Yumist would have become profitable company by June 2018
As of Mar'17, Yumist made Rs. 65 in margins per order for an average order value of Rs. 190. The start-up's delivery outlets were breaking even at 70 orders in a day. It acquired new customers at Rs. 180 and recovered this money within 45 days. From March until September, the revenues and gross margins of the company tripled.
Yumist enjoyed good word-of-mouth
In its blog Post, Yumist wrote: "Owing to our product quality and customer experience, we enjoyed good word of mouth (with 50% of our new customers coming through referrals), 70% of our monthly orders were from repeat customers."
The food delivery market in India
Cloud kitchens (online ordering/delivery restaurants) are facing stiff competition from the food delivery biggies, Zomato and Swiggy. Smaller players aren't able to find investors compared to the well-funded peers. Yumist is among the food-tech start-ups, including TinyOwl, Spoonjoy, and Dazo, which closed in about a year. Despite closing down, Yumist said, "Cloud Kitchens are here to stay," acknowledging the opportunity in the sector.
Yumist on dull investor appetite in 2016
"2016 onwards, food tech (in the manner the term is loosely used) had amassed a notoriety with investors and media and became almost a dirty word. We failed in all our attempts to fund raise since then, as investors wanted to wait it out."
Yumist was launched in 2014
Yumist was founded by Former CMO of Zomato Alok Jain and restaurateur Abhimanyu Maheshwari to provide home-style food at affordable prices in Gurugram in 2014. It expanded in Delhi-NCR and later started operations in Bengaluru. However, it shut down its Bengaluru operations in May'17. The start-up had raised funds from investor Orios Venture Partners and Ronnie Screwvala's fund Unilazer Ventures.
