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Swiggy to invest Rs 75 crore in two years for cloud kitchen expansion

The food-tech firm already has 1,000 cloud kitchens in 14 cities, the highest by any player

Yuvraj Malik  |  Bengaluru 

Swiggy

Food delivery major said on Wednesday that it will invest Rs 75 crore over two years to expand its network of cloud kitchens across the country.

Two years ago, it started Access, an effort where would take up real estate on lease, refurbish it into small shared kitchens and sub-let it to restaurant chains. These are delivery-only cloud kitchens and help restaurants service areas where they do not have a presence without having to invest in the infrastructure on their own.

So far, Swiggy has spent about Rs 175 crore towards opening 1,000 cloud kitchens in over a million square feet of space, across 14 cities. This, the company claimed, is the biggest network of cloud kitchens owned by a single player. Zomato has around 650.

Going forward, it expects to launch more cloud kitchens, especially in tier II cities like Guwahati, Tirupur, Bareilly, Surat and Kochi.

“Swiggy has always maintained that cloud kitchens will be the future of food delivery,” said Vishal Bhatia, chief executive office, New Supply at Swiggy.

“Very soon, India will have the second-highest number of cloud kitchens in the world, only next to China. The milestone of Swiggy successfully creating over 1000 partner kitchens shows the faith the restaurant partners have in the concept and bolsters our pioneering efforts in enabling more success stories in the restaurant ecosystem,” said Bhatia.

Cloud kitchens is the new hot area in food-tech, with major firms going after it to better satisfy consumer demand and increase earnings for restaurant partners. Last month, it was reported the Uber founder Travis Kalanick’s new firm City Storage Systems is building an India team and may soon launch delivery-only kitchens here.

Through the cloud kitchen model, Swiggy said it is able to bring quality restaurants across India.

For instance, it helped launch Buhari and Kumarakom from Chennai in Coimbatore, Biryani Blues from Delhi in Chandigarh, and NIC Natural Ice Cream from Pune in Chandigarh and Jaipur.

Raymond Andrews, founder of Biryani Blues said the cloud kitchens have been “a good way for us to expand quickly into newer territories not just in Delhi-NCR but also to Chandigarh. In the six years of our existence, I have found (Swiggy) Access to be the easiest way to expand my brand.

“Swiggy Access has helped us expand easily by eliminating obstacles like rent, logistics, customer acquisition and market fit,” said Mansoor Ali, director at Meghana Foods, a popular biryani restaurant in Bangalore.

To date, Swiggy has partnered with over 250 restaurants. It said one out of three restaurants who partners, typically goes in for a second or a third cloud kitchen. In the process, Swiggy said it has created 8,000 direct and in-direct jobs in the restaurant industry.

“Swiggy Access has helped grow restaurant businesses, deliver unmatched customer experience and created employment opportunities in metros as well as tier 2 and 3 cities,” said Bhatia of Swiggy.

Founded in 2014, Swiggy claims to work with 50,000 restaurants in more than 50 cities in India.

In December last year, it raised a mammoth $1 billion round from Nasper and Tencent that launched it into a growth phase. Swiggy has since been investing in technology, increasing penetration in tier II and tier III cities and towards promotional offers to hook the consumer base.

First Published: Thu, November 21 2019. 14:52 IST
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