Rebel Foods circles back to offline business with bigger plans

In 2011, Jaydeep Barman pitched the idea of Faasos, unicorn Rebel Foods’ origin point, to GV Ravishankar of venture-capital firm Sequoia, detailing plans to build a countrywide chain of quick-service outlets selling wraps. He wanted the chain to be like Domino’s or McDonald’s, but have a menu featuring Indian flavours.

Sequoia felt Faasos had the potential to become a large fast-food brand and invested $1.3 million. In two years, Barman and his team set up eateries in 75 locations across top cities. But there were some unexpected complications: 70% of Faasos’ customers surprisingly never visited its outlets, ordering online instead.

“The challenges of a retail network started compounding at scale — location failures, high rents for good locations and most importantly, the difficulty in balancing dine-in and delivery customers from the same store network,” Ravishankar recounted in a blog post.

Barman wondered if a retail presence made sense and decided to quickly change course. In 2014, Faasos began shutting its dine-in establishments and opening cloud or dark kitchens, which cater to only online delivery orders.

In the following three years, the company raised nearly $80 million and started more cloud kitchens, launched new brands and expanded overseas. It also renamed itself as Rebel Foods.

After all the iterations, things have come full circle for Barman as he revisits offline retail plans, with the partnership involving US fast-food chain Wendy’s acting as the spur.

“Offline will always be relevant. The decision was about when, not whether. We are taking baby steps this year,” he told The CapTable. 

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He compares the offline push to the strategy adopted by vertical ecommerce players such as FirstCry, Lenskart and Nykaa, which have established a retail presence to widen their market base.