Exciting news in the world of food delivery as Kitchens@, the cloud kitchens infrastructure startup, has acquired the cloud kitchen business of SoftBank-backed Indian food delivery major Swiggy in a share swap deal.
Junaiz Kizhakkayil, CEO of kitchens@ – Loyal Hospitality Pvt. Ltd highlighted the potential of the acquisition, saying, “The addition of Swiggy’s Access kitchens will bolster the reach and operations of Kitchens@’s in four cities across 52 locations and 700+ kitchens, providing customers with more convenient and efficient food delivery options.” This move is in line with Kitchens@’s mission to make fresh food more accessible by powering a super-efficient food delivery ecosystem.
Swiggy Access, the company’s cloud kitchen business, was started in 2017 to help restaurants set up delivery-only kitchen spaces in areas where they do not currently operate. Rahul Bothra, CFO of Swiggy, said the business was established to bridge hyperlocal gaps in restaurant supply and solve for variety, quality, and convenience of food. Speaking on the acquisition, he stated, “We are confident that Kitchens@ is fully equipped to nurture this ecosystem by innovating and building more supply.
Swiggy has been cutting costs amid slow growth in its food delivery business and a funding crunch caused by macroeconomic factors. The company recently tightened its password-sharing policy for its Swiggy One users, limiting multiple logins to two devices. Swiggy One users are eligible for free deliveries and other offers across the company’s various businesses like InstaMart, and Dineout.
It’s worth noting that this is the latest business that Swiggy has sold off, with the company announcing its exit from the meat delivery business in January. Despite the challenges, the Indian food delivery industry is expected to reach $10 billion in GMV by 2025. Swiggy and Zomato currently dominate the market, and both companies are constantly vying for a bigger share.
This acquisition is a significant step for Kitchens@, which already acquired Zomato Infrastructure Services in 2018. The move will enable a combined annual GMV of $65 million for the cloud kitchens infrastructure provider, with plans to increase that to $100 million in the next six months.