Online restaurant Petoo to ramp up expansion plans

Looks to expand to 5 cities in 2016; will set up a food factory in Bengaluru

At a time food tech startups are scaling down their business due to cost constraints, Bengaluru-based online restaurant Petoo is treading a slow but cautious path of expansion. The company, currently present in select locations in Bengaluru, is looking to expand to five cities in 2016.

It has been operating at 13 locations in the city and last week expanded in six more locations.

The six-month-old company is in final talks of raising about $5 million which will be used for the expansion. The company that works on a hub and spoke model currently has a kitchen in Bengaluru, which it is in the process of converting to a food factory.

"We are planning to take food preparation to a larger scale so that there is little difference in the taste that is being delivered to different parts of the city. The equipments for the food factory will be designed and developed in-house," said Kumar Setu, co-founder of Petoo.

Through the six months after Petoo began its operations, there has been a lot of learning on what worked well in the food-tech space, said Setu. "The major lesson we had was in the logistics space."

Initially, Petoo delivered food boxes only through its own team of delivery boys. However, it has now opted for third-party delivery partnerships with hyperlocal logistics startups like Opinio and Road Runnr. As a result, the six-month old company claims to have brought down its delivery cost from Rs 170 to Rs 53.

Petoo's co-founder Ritesh Dwivedy was also the co-founder of Just Eat that was later acquired by Rocket Internet.

Currently, the company delivers more than 1,000 orders per day and is growing at about 120% month on month. It has a team of about 65 including in operations, kitchen, technology and marketing.