Speed Kitchen on Shark Tank India : Three Sharks In

Speed Kitchen

Three points you will get to know in this article:

  • Speed Kitchen simplifies cloud kitchens for food brands across India.
  • Secured ₹2 Crores for 6% equity, valuing the business at ₹33.33 Crores.
  • Rapid growth with FY24-25 revenue projected at ₹5.5 Crores.

What is Speed Kitchen?

Speed Kitchen logo

Speed Kitchen is an Indian startup revolutionising the food industry by providing ready-to-operate cloud kitchens. Launched in March 2021 by Paurav Rastogi and Shamin Kapoor, the company helps food brands start their operations in just four days with minimal capital investment.

Click here to visit their official website : Speed Kitchen

Operating in four cities with over 15 locations, Speed Kitchen currently hosts more than 50 brands running from 130 kitchens. Their clients range from household names like Haldiram and Chaayos to startups like the Shark Tank-funded Daryaganj.

The Founders Behind Speed Kitchen

With a civil engineering degree from VIT Vellore, Paurav’s experience includes roles at OYO as the head of transformation. His exposure to co-working kitchens in London inspired Speed Kitchen’s innovative model.

Shamin, an alumnus of Singapore, brings expertise in performance marketing from his time at Housing.com. Together, the duo combines real estate acumen and marketing strategies to drive Speed Kitchen’s success.

How Speed Kitchen Operates

Speed Kitchen begins by identifying prime real estate using metrics such as average order value, rider availability, and population density. They then conduct compliance checks before offering these spaces to brands.

Support for Brands

Brands partnering with Speed Kitchen benefit from:

  • Revenue Sharing Model: Brands pay a percentage of their net sales, capped at 1.5–2.5 times the minimum guarantee.
  • Low Setup Costs: Brands provide their own equipment, while Speed Kitchen handles security and maintenance.
  • Shared Spaces: A single kitchen can host multiple brands or sub-brands.

Key Features of Speed Kitchen

  • A brand can launch operations in just four days, making it an ideal solution for businesses looking to expand quickly.
  • By covering maintenance and security, Speed Kitchen minimises the upfront costs for brands, ensuring a lower barrier to entry.
  • From catering for the Ambani wedding with Chef Ritu Dalmia to working with established names like TFS and Chaayos, Speed Kitchen has built a strong reputation in the food industry.

Speed Kitchen’s Financial Growth

The company has demonstrated exceptional growth since its inception:

  • FY21-22 Revenue: ₹36.5 Lakhs
  • FY22-23 Revenue: ₹1.51 Crores
  • FY23-24 Revenue: ₹3.25 Crores
  • Projected FY24-25 Revenue: ₹5–₹5.5 Crores

Profitability and Efficiency

  • EBITDA (FY23-24): 13%
  • Net Profit (FY23-24): 5%
  • Return on Capital Employed (ROCE): 15–18%

With ₹3.5 Crores in the bank and a total CapEx of ₹1.5 Crores, Speed Kitchen operates efficiently while maintaining steady profitability.

Speed Kitchen on Shark Tank India

The founders entered Shark Tank India seeking ₹2.5 Crores for 10% equity, valuing the business at ₹25 Crores. They presented a detailed pitch highlighting their operational model, financial growth, and plans for expansion.

Shark Reactions and Offers

  • Shark Vineeta Singh: Opted out, citing limited scalability due to EBITDA and PAT constraints.
  • Shark Ritesh Agarwal: Offered ₹2.5 Crores for 10% equity, emphasising his expertise in real estate.
  • Shark Azhar Iqbal: Partnered with Ritesh on the same offer.
  • Shark Kunal Bahl: Proposed two options: ₹2 Crores for 8% equity or ₹2.5 Crores for 10%.
  • Shark Aman Gupta: Initially opted out but returned with an offer of ₹2 Crores for 10% equity after further discussions.

Speed Kitchen Final Deal on Shark Tank India

The founders countered with two proposals:

  1. ₹2 Crores for 4% equity, valuing the company at ₹50 Crores.
  2. ₹2.5 Crores for 5% equity, valuing the business at ₹50 Crores.

Aman exited after the counter, but Ritesh and Kunal revised their offers to ₹2.5 Crores for 7.5% equity. Eventually, all sharks except Aman came together to make a collective offer of ₹2 Crores for 6% equity, valuing the company at ₹33.33 Crores.

Challenges and Opportunities

These are some potential challenges and opportunities for Speed Kitchen.

Challenges

  • EBITDA Limitations: High occupancy rates leave little room for margin improvement.
  • Scalability: Expanding to new cities requires significant real estate and operational expertise.

Opportunities

  • Demand for Cloud Kitchens: With increasing reliance on food delivery, the cloud kitchen market is poised for growth.
  • Client Expansion: The existing network of over 50 brands offers ample room for cross-selling and collaboration.

The Future of Speed Kitchen

With the ₹2 Crores funding from Shark Tank India, Speed Kitchen plans to:

  • Expand to more cities, targeting high-density urban areas.
  • Strengthen its operational model to improve scalability and profitability.
  • Enhance partnerships with new food brands, further diversifying its portfolio.

The founders aim to maintain steady growth while exploring innovative ways to optimise their business model.

Lessons from Speed Kitchen’s Shark Tank Journey

The Speed Kitchen pitch offers valuable takeaways for aspiring entrepreneurs:

  1. Preparation Pays Off: The founders’ detailed knowledge of their financials impressed the sharks.
  2. Be Open to Collaboration: Joining forces with multiple sharks allowed them to secure the best deal.
  3. Adapt During Negotiations: Flexibility in counteroffers led to a win-win agreement.

Speed Kitchen is redefining the cloud kitchen space in India by offering brands a hassle-free way to expand. Their business model, combining efficiency with scalability, has attracted prominent clients and significant investment.

The Shark Tank India deal not only validates their potential but provides the resources needed to accelerate their growth. As the food delivery industry continues to flourish, Speed Kitchen is well-positioned to become a key player in the cloud kitchen revolution.

For food entrepreneurs seeking an efficient, cost-effective solution to grow their business, Speed Kitchen stands out as a trusted partner.

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