Curefoods, a prominent player in the Indian cloud kitchen market, announced a 53% increase in operational scale for the fiscal year that ended in March 2024. At the same time, by drastically cutting advertising expenses, the Bengaluru-based company cut its losses in half. The Registrar of Companies (RoC) provided Curefoods with its consolidated financial statement, which showed that its operating revenue increased by 53.17% to Rs 585 crore in FY24 from Rs 382 crore in FY23.

CakeZone, Masalabox, EatFit, Yumlane, and Aligarh House Biryani are all operated by the cloud-kitchen platform Curefoods. There are currently more than 100 kitchens spread throughout 12 Indian cities. The company's only source of income during the previous fiscal year was from the selling of these foods. In FY24, Curefoods' overall revenue reached Rs 635 crore thanks to an additional Rs 50 crore in interest income.

With a 33.72% increase to Rs 229.6 crore, the cost of materials continued to be the highest expense. Employee benefit costs increased 43.18% to Rs 148.2 crore, while advertising costs decreased 50.8% to Rs 52.8 crore. Depreciation costs increased by 45.2% to Rs 62 crore, and guarantee commission charges increased by 56% to Rs 109.2 crore. Ultimately, Curefoods' overall costs in FY24 almost increased to Rs 806.8 crore.

The company was able to cut its net loss by 50% to Rs 172.6 crore in FY24 as a result of a significant drop in advertising expenses. Its EBITDA margin and ROCE were -12.88% and -23.31%, respectively. In FY24, Curefoods earned one rupee by spending Rs 1.38 per unit. The company reported current assets of Rs 326 crore as of March 2024, which included cash and bank balances of Rs 37.5 crore.

Curefoods has raised almost $200 million so far from investors like Accel, Chirate, Alteria, and Binny Bansal's Three State Ventures, according to a reliable startup intelligence database. Over a dozen cloud kitchen brands, including Yumlane, Smoodies, Cakezone, Maverix, and Nomad Pizza, have been purchased by the Ankit Nagori-led company since its founding.

After Rebel Foods, Curefoods is the second-biggest player in the cloud kitchen market. Rebel Foods reported operational sales of Rs 1,420 crore in FY24 and recently raised USD 210 million in one of the biggest funding rounds of 2024. Other prominent companies in the market are Biryani By Kilo and EatClub.

The significant reduction in advertising expenditures speaks for itself. Inadequate brand development, followed by what appears to be the commodification of the delivery industry. More platform-driven than the actual owners of the kitchen or restaurant.  We think that, in terms of margins, the high level of platform dependence is not good for anyone in the long run.

Although certain segments of the market may expand, the market as a whole is not expanding at the same pace, and platforms will continue to increase their margins. Will Curefoods turn a profit before the profit margins worsen? Though it may seem hopeless at the moment, we think 2025 will see additional attempts to break Swiggy and Zomato's hold on the meal delivery industry. Because of their legacy delivery business, Domino's is still the lone success story, and the distinction is evident in a number of ways