This Entrepreneur Shares the Recipe to Win Investors' Trust
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Technology has undoubtedly changed the Food-tech segment. Due to increased competition in the industry, many start-ups are compromising on quality, safety and taste. Some are trying to survive in the market while others are on the verge of shutting down after being unsuccessful in raising fresh capital.
In this difficult scenario, Bengaluru-based Hungerbox is looking to scale up the business and become India's biggest food-tech company in terms of daily orders processed through expansion into cities around the country.
Started in 2016, the food delivery start-up recently raised $2.5 million in a pre-Series A funding round led by Singapore-based Lionrock Capital and Kris Gopalakrishnan, Co-Founder, Infosys.
Entrepreneur India had a chat with Sandipan Mitra, CEO, HungerBox to know what helped his start-up gain interest from investors and receive funding.
It's a Matter of Scalable Business Model:
Mitra feels the beauty of our B2B Food-Tech business model is the fact that it requires a very small amount of capital as compared to our B2C Food-Tech counterparts, who need sizeable amounts to fuel the growth. With the seed funding, Hungerbox has signed up marquee clients like Accenture, Capgemini, Microsoft, Qualcomm, etc., which acted as a validation of their business model.
"Showcasing a highly profitable and scalable Food-Tech Business model to the world and executing it to perfection was the giant leap that helped us gain the trust of the Investor community. From then on, it was purely a matter of going through the usual fundraising process as we have done in our past highly successful Food-Tech ventures," said Mitra.
What the Future Looks Like?
A well-documented business plan is an important element in securing funding for a start-up. It also shows that the entrepreneur is serious to get investment.
For the pre-Series A fundraise, Mitra met a few of the investors and closed out the round soon as he wanted to keep razor sharp focus on executing the business plan.
"Our time has been spent mostly on executing the strategic vision of our business. This razor-sharp focus has helped us beat our targets consistently and we would be continuing to do so with the recent capital influx," said Mitra.
When asked about future plans, Mitra shared that the recent funding received will help in boosting their ability to scale up their operations and keep pace with the traction witnessed in the digital cafeteria management solution.
"We also hope to reach 5.5 to 6.0 lakh customers in the coming year, which will amount to an almost six-fold growth in 12 months. The future looks exciting and we hope to continue with this rapid growth," he added.
Looking for Additional Funding?
Mitra believes the beauty of their business model is that they are a fundamentally profitable business which has grown without employing any tactics like discounts, cashback hooks, etc.
"If we were to grow this business at a normal pace, we can choose to break even in the next couple of months. Our goal is to grab the market and scale before anyone starts in this space. Hence, we will be looking at additional funding to scale our operations in the next 12-18 months. Having said that as opposed to a typical B2C business, our business model has enabled HungerBox to scale rapidly to this point without needing too much of investment," said Mitra
Additionally, Hungerbox is clocking more than 120,000 daily orders. The start-up is hoping to reach half a million orders by end-2018.
"The traction we have received and the solidifying of our business model have been key reasons behind the successful fundraise," he concluded.