A founder of Cloud Kitchen shared a brutally honest report of his commercial career, from the sale of 12 salads per day in a small basement to the management of 78 cloud kitchens and at the service of 14,000 daily orders. The increase was dazzling, but the realities of the rapid scale, the pressure of investors and dependence on the platform have reduced the dream.
The founder, with the Squishhywaffle username, shared his trip in an article on the Grapevin social media platform.
Humble Beginnings for a booming company
Six years ago, the founder began to sell fresh salads in a basement of 180 square feet on the Galleria de Gurgaon market. With only 8 lakh savings, the company started with 12 daily orders at a price of 250 ₹ each. The losses were inevitable, but the customers delighted on the fresh ingredients and the perfect parts. In less than six months, orders reached 200 per day, even breaking the economies of scale have started.
By 2021, the company had exploded during the pandemic. Bulk orders for companies and the increase in demand for healthy foods pushed revenues to 1.2 crosses ₹ per month. A 5 million dollars financing tour followed, with a vision of extending to 100 kitchens across India. At its peak, the company had 14,000 daily orders, 45 ₹ lakh of daily income and 400 employees.
The hidden costs of scaling
The dream started to collapse while rapid expansion revealed cracks. The rise in raw material prices, high platform commissions and intense competition have eaten in profits. The waste increased from 8% to 18%, training costs jumped and marketing costs reached 12-15 ₹ per order. The dependence on platforms such as Swiggy and Zomato has still stretched operations, with changes in algorithm, visibility and commissions going to 32%.
Investors are asking for a 3X growth in annual shift have worsened the challenges, pushing the company to burn 80 Lakh per month. Today, 30% of kitchens operate at a loss, and the founder plans to reduce 40% of operations.
Thinking about the trip, the founder shared precious ideas:
- Prioritize the economy of sustainable units on growth at all costs.
- Avoid excessive dependence on third-party platforms which control customers data and visibility.
- Create a business that aligns your life, not one that consumes it.
“With hindsight, I should have stopped at 8-10 kitchens,” admitted the founder. “We were profitable, manageable and happy. The food was better and we knew the names of our customers. “”
The message, shared on the vineyard, triggered user reactions offering support, advice and admiration. We suggested creating a direct control application to reduce platform costs. Another has noted: “Sometimes the best way to build something big is to stay small enough to survive.”
