Yumist, an India-based startup aiming to disrupt the daily meal industry, has landed a $2 million investment to increase its presence from three cities to eight.
The pre-Series A round was led by Unilazer Ventures — the fund from media entrepreneur Ronnie Screwvala — with participation from existing investor Orios VP and Silicon Valley-based investor Steven Lurie.
Founded in November 2014 by ex-Zomato CMO Alok Jain and food and beverage entrepreneur Abhimanyu Maheshwari, Yumist has a different proposition to Rocket Internet-backed FoodPanda or Zomato which focus on delivering from restaurants. Instead, Yumist targets the mass-market food industry with daily meals that cost upwards of 65 INR, or around $1. That’s more akin to street food, or the kind of meals that urban workers take during their lunch breaks.
Margins may seem low but Yumist said it handles its processes in house — it cooks its own meals, handles storage, delivery etc — which it claimed helps to save on costs and optimize its processes.
“Having come from Zomato and seen what’s happening, a lot of tech stuff is happening [in the food industry] but there’s also a large market for daily meals. People are very price sensitive and don’t want to spend more than a dollar,” Jain told TechCrunch in an interview.
“This market is twenty-times larger than the restaurant industry, but hasn’t seen any change over last five decades. Yet, if I need a cab, I press a button and get it. The consumer has evolved but the experience in the daily meals market hasn’t,” he added.
Yumist currently operates in Gurgaon, South Delhi and Bangalore. The team is planning to increase its presence in those three areas, and expand gradually to reach eight cities by the end of next year. Jain explained that, unlike others in the space, Yumist deliberately started out slowly.
“We initially tested our unit economics, and then tested scale. We’re in business to make profits and gain scale,” he said, adding that — right now — the company spends around 35 INR per delivery but plans to reduce that cost to 20 INR using technology to optimize its delivery teams.
Yet, with a lean team he said that they are capable of expanding each locations by 10-15 new ‘zones’ — small areas of service — per week, so they can grow their footprint within selected cities rapidly.
“After this round, we will still keep our heads down until March in our current three cities, and show that we can be gross margin profitable at a company level,” Jain said. He added that the company is close to introducing weekend meals, having recently expanded to serving dinners as well as lunches.
All-in-all, Yumist has 200 staff, of which 20 are non-operational and based at company HQ.