Freshmenu rival Eatfresh shuts down on-demand delivery

Rajiv Subramanian, Eatfresh’s founder, with his team of chefs. Photo credit: Eatfresh.

Bangalore-based food delivery startup Eatfresh has stopped its on-demand food delivery service and will only do group and bulk orders from now on. The startup used to offer chef-cooked Indian and international cuisines with a daily rotating menu, much like Freshmenu, in Chennai and Bangalore.

Eatfresh is the food delivery brand of Ubiquitous Foods, which also operates the eight-year-old retail bakery chain Ovenfresh. Venture capital firm Kalaari Capital had picked up a minority stake in Ubiquitous Foods in 2013.

“We took this tough decision because we feel our margins and revenue are far superior on Ovenfresh than with Eatfresh. It made more sense to utilize capital on Ovenfresh,” Eatfresh CEO Rajiv Subramanian told Tech in Asia.

Before the rollback, Eatfresh contributed just about 10 percent to overall revenue for Ubiquitous Foods. The company is looking at trimming that down to 5 percent this year. Ovenfresh, on the other hand, contributes close to 90 percent of the company’s turnover, and brings in significant margins of 40 percent.

Rajiv declined to share the overall revenue of the company. Bigger rival Freshmenu had reported total revenue of US$ 196,690 in March 2015.

The idea behind Eatfresh was to control all stacks of a food delivery process, from order-taking to food preparation to delivery. “Managing the full-stack gives high margins of around 40 percent, but it also requires a lot of funds to manage processes from top to bottom. This could have hurt Eatfresh,” says an analyst who didn’t want to be named, because the startup hasn’t released an official statement on the rollback.

Rajiv, however, clarified that margins for Eatfresh wasn’t as high as pointed out by the analyst. “We typically got profit margins of 20 percent, at the maximum,” he says. Eatfresh was launched by Indian Institute of Management, Ahmedabad, (IIM-A) alumnus Rajiv in 2015.

“Dear customers, we no longer operate our on-demand meal delivery service, and will only cater to party or bulk orders in the future. We strived to create a differentiated offering, and hope that we leave you with some happy memories…” says a message on the Eatfresh website.

Eatfresh claimed to have raised nearly US$4 million in total after Kalaari Capital put in additional funds in the company in December 2015.

The funds were to be used for expansion into Pune, Hyderabad, and other cities.

Screenshot of Eatfresh website, notifying users of the rollback. Photo credit: Eatfresh.

See: How FreshMenu plans to build a foodtech giant in India

Series of shutdowns