Downturn in foodtech space continues as Gurgaon-based Yumist, which cooks its own meals and deliver it to customers through a cloud kitchen model, said on Friday it has decided to shut down after it was unsuccessful in raising fresh capital to survive in a competitive market.
Launched in 2014 by Alok Jain, an ex-CMO at Zomato along with restaurateur Abhimanyu Maheshwari, Yumist had raised total of $3 million in two rounds from three investors including Unilazer Ventures and Orios Venture Partners. The last funding it racked was in December 2015 and since then it failed to raise any fresh funding.
In an official blog post on Friday evening, the company announced, “We are shutting shop today. We failed to raise the kind of capital that this business required while staying true to the customer problem. In hindsight, there’s a bunch of internal and external factors that led us to this dead end. From launching in a second city prematurely, or committing to a high growth, high burn model just because prospective investors wanted to see that back in 2015, or taking a tad bit too long to find the right business model, we made our mistakes. We learnt from these mistakes and recovered fast, but maybe not too fast.”
In May, Yummist had already halted its operations in Bengaluru, citing reason of not owning a kitchen facility as the hinderance for the startup in providing quality service and innovation in menu to its Bengaluru customers.
In the same month, an another Gurgaon-based food delivery startup Eatonomist had shut down and prior to that TinyOwl, Spoonjoy, Dazo and a bunch of other food startups shuttered their operation in the past year or so . Globally, too, the segment has seen a churn with San Francisco-based Sprig and SpoonRocket shutting shop after a bevy of such services got funded in the heady years of 2014-15.
The Yumist blog post on Friday said that the company was clocking Rs 65 in margins per order at an average order value of Rs 190 by March this year. “Our delivery outlets were breaking even at just 70 orders a day, we were acquiring new customers at Rs 180 and recovering back this money within 45 days. Owing to our product quality and customer experience, we enjoyed good word of mouth (with 50% of our new customers coming through referrals), 70% of our monthly orders were from repeat customers and from March until September we tripled our revenues and gross margins. With these trends, Yumist would have become a profitable company by June 2018,” the blog post said.