Drooling over food at five-star hotels?

Based out of New Delhi, FooDrool, a web and mobile app-based food ordering and delivery platform, is now planning to roll-out in Mumbai, followed by Bengaluru and Kolkata. FooDrool founder Tanmay Garg, in an interview with Ateeq Shaikh, explained the idea behind setting  up a platform to deliver high quality and hygienic food.

Where did the idea of having such a service come from?

The idea behind FooDrool is to give high quality and hygienic food from selected restaurants and hotels. Initially, 5 star hotels couldn't digest the idea of their food getting delivered. Living in Delhi, we keep ordering food a lot, like four times a week. Back in January-February 2015, we had placed an order at 12 midnight, which was delivered only at 2 am. Our order was vegetarian food, what we received was non-vegetarian food. We were taken aback with the response on confronting the delivery guy "If you have so much of a problem, why don't you start your own venture?" This is when we tought of setting-up a platform to deliver food even after midnight. It is only the restaurants at the 5 and 7 stars that provide food post-midnight.

What challenges did you face?

We have tried food at all the star hotels. Earlier, we approached all 5-star hotels in Delhi. They were unable to digest that they would deliver food like any other restaurants in town. They have a very loyal and limited clientele. Zomato and Swiggy are well funded, unlike us, still they do not cover a single 5-star hotel. The average bill or order on thoe platforms is possibly around Rs 300, while our average bill or order has to be around Rs 1,500. We do not want to venture into that category of say Rs 100 to Rs 2000 order. In order to make it economically viable, we have to stick to an average of Rs 1,000. Although they have big funding with them, they are also burning cash like anything. Our idea is to not to burn cash at that rate. No doubt that we are also burning cash right now, we hope to be at a breakeven point soon, say by April 2017.

You started the venture with Rs 40 lakh as seed capital, did you get funding from any other source or are you scouting for one?

The initial Rs 40 lakh was my own money from my father. We would be open to funding. Till today, the total capital or investment has been close to Rs 1 crore.

Why do you continue to burn cash, when your average bill is a lot more than your competitors?

Our presence is only in New Delhi and Gurgaon, but the total number of orders daily that we are doing is not as much as Swiggy or Zomato. We have tie-ups with limited number of restaurants and the average number of orders is around 150-200. FooDrool delivers food up to a radius of 12 kilometers, unlike other food delivery companies, which are restricted to just 5 to 7 kilometers. Plus, the commissions is another focus areas, the competitors work on a lesser commission or discount, our commission is much more. There are fixed costs that remains the same, where we can't cut budgets which includes marketing.

What are your expansion plans?

The next city we would want to work in is Mumbai, for which we have already started doing research and tie-up work. It will take another 4-5 months to launch in Mumbai. We do not anticipate problems in tie-ups with restaurants as there are several restaurants with whom we have a tie-up in Delhi and they have a presence in Mumbai too. So, it is just an extension of an understanding between us. After Mumbai, Bengaluru (by March 2018) and Kolkata are other cities we are looking forward to. But demonetization affected our business growth as much as 40%. Hence, we will have to push our expansion plans a bit further. We were looking to breakeven in December, but demonetization disrupted the growth trajectory. Usually, in December, there is a lot more business due to Christmas holidays, people travelling from abroad to India, etc; but it did not happen as much as it should have happened.