The story of rebel foods is like the screenplay for a movie. The company, now called Rebel Foods started off as a passion project by a 28-year-old Jaydeep Barman was then known as Faaso’s. Homesick and craving for his favourite egg rolls Barman started a small stall along with Kallol Banerjee, his colleague, and started selling egg rolls. The idea took off, and his stall came to run smoothly. Later on, Barman had to leave overseas for his MBA, during which time he delegated the stall so as to keep it running.
When the duo returned, they found out that the stall was still up and running, and better still it was making a considerable profit. Revenues had jumped from ₹4 crores in fiscal 2012 to ₹62 crores in just four years. So the boys decided to expand Fasos. Soon the brand had expanded to three cities and opened 40 outlets.
Rebel Foods: the fall and their bounced back
But even the rising sales could not dim the fact that the company was barely getting by, it soon started drowning in losses. Barman being the analyst he is, tried to figure out the root of this problem. The fact was that Fasos was a hit among its customers and sales were plenty as well, then what was going wrong?
After a detailed study, Barman realized that it was the costs associated with the restaurants that were killing his business. Another thing he realized was that these costs were unjustified because around 75% of his sales came from order deliveries. This is when he had the lightbulb idea of moving into the Cloud Kitchen sector.
The Turnaround of Rebel Foods
Despite the warnings he got from disbelievers, he went forth with his plan, shut down all restaurants, and instead started cloud kitchen services from non-premium sites with delivery-only services. This major turnabout had the desired effect. The sales were barely affected and the extra costs got cut off. The company boarded the profit flight again. And soon they were soaring in the sky.
Expansion and Growth
But Barman being him, didn’t just stop there. He estimated the potential the cloud kitchens had and he also knew that he had not even used half of the said potential. This is when they started to expand. Initially, they started selling pizzas under the brand name of Faaso’s. But soon they realized that customers only wanted rolls from Faaso’s. To tackle this, Barman created a new brand called ‘Early Trails’ but still used the same kitchen and the same recipe. The pizzas started selling now!
But Barman knew he couldn’t tap into the pizza space just yet because two major players were already dominating that particular food. So Barman decided to go for another food item and another brand name. This is where Behrouz began. The famous brand with its more famous biryani became the second success by the duo.
With the success of Behrouz, the founders of Faaso’s had cracked the ultimate formula. It was just a matter of time until new brands came rolling out from the same cloud kitchens to serve a variety of cuisines.
Recipe for Rebel’s success
Sharing his success mantra Barman says, “You make abnormal returns only when you do something abnormal. It’s good to be crazy,”. He believes it to be a good omen when people don’t agree with his radical ideas. “It means they won’t copy you,” he says. Living up to ‘being crazy’ and defying expectations to take radical risks, Barman changed the name of Faasos to Rebel Foods in 2018.
A peek into their finances & funding
The company has scooped up $50 million from Coatue PE Asia in series E round. According to regulatory filings, Rebel Foods, which runs food brands such as Faasos among others, has allotted 5,627 Series E1 CCPS shares to Coatue PE Asia at a price band of Rs 6.39-6.74 lakhs per share to raise the aforementioned amount.
The price per share has inflated by nearly 39% as compared to the Series D round in September. At that time, Coatue PE Asia had invested $125 million in the third tranche of its Series D round. Post investment, the PE firm will control close to 22% stake in Rebel Foods. According to Entrackr’s back-of-the-envelope calculation, Rebel Foods has crossed the $700 million valuation mark. It’s an eye-popping $200 million valuation jump for the Mumbai-based cloud-kitchen firm in less than 6 months. The company was valued nearly $504 million in September 2019.
Interestingly, Rebel Foods is also investing Rs 3 crore in home-cooked food distribution FoodBuddy, the regulatory filings further reveal. The Jaydeep Barman-led company aims to leverage FoodyBuddy’s network of about a 1,000 home cooks to foray into the home-cooked meals vertical.
Currently, Rebel Foods has 12 brands under its name, namely Fasos, Behroz Biryani, Oven Story, Slay, Lunchbox, Mandarin Oak, Sweet Truth, The 500 Calorie Project, Firangi Bake, The Good Bowl, Navarasam, and The Biryani Life. The stats on their website state that they have over 3000 internet restaurants, 320 cloud kitchens spread in 35 cities in India.
Today it is fairly easy to start a cloud kitchen because there are already many established players who took the risks and proved that it is a viable business. But making a cloud kitchen chain of the likes of Rebel is not something that can be replicated. Rebel came up with an idea that was ‘one of it’s kind’ and they rocked it.
The brilliant success of Rebel Foods was a direct result of the founders’ eye for opportunities in the market and their analytic and strategic minds. Their path was not one of instant success, regardless of how their story may sound. They came across hurdles, but with smart logic, they surpassed each one to come out more successful than ever.
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