Dil Foods, a virtual restaurant operator based in Bengaluru, has raised $2 million in a Pre-Series A funding round led by V-cube Ventures and Mount Judi Ventures.
The platform operates an asset-light model wherein they leverage the existing but underutilised infrastructure of existing restaurants to manage the last mile of cooking and distribution while they manage the business operations, supply chain, branding, and marketing.
Founder and CEO, Arpita Aditi, explained that the company creates brands, menus, pricing, and packaging, establishes efficient processes, and then collaborates with local restaurants possessing suitable infrastructure to handle orders. Dil Foods also ensures the entire supply chain is managed to maintain quality and consistency across its outlets.
Expansion
Currently, it has eight brands and has collaborated with 54 local restaurants in Bangalore and Hyderabad. The raised funds will largely be deployed for the expansion and launch of new brands. “We will be expanding both vertically and horizontally, which includes launching six new brands and new cities such as Chennai, Pune, and Mumbai and then up north towards Delhi NCR in this financial year.”
Dil Foods specialises in authentic regional cuisine commonly consumed on a daily basis. Its upcoming brands will continue to focus on providing such cuisine. Across the existing brands, there are a total of 220 SKUs.
The company selects restaurant partners based on their level of underutilization which can be small, medium, or even national chains. “If they are underutilised and reach out for additional income to be flexible, we will undoubtedly take them into consideration,” she explained.
Revenue model
Regarding its revenue model, the company collaborates with restaurant partners under a fixed pay-per-SKU arrangement, where partners receive a 40 per cent profit margin on each item sold through the platform. Presently, its products are sold through Swiggy and Zomato.
Arpita Aditi further elaborated that once the operators deduct the commission, the remaining amount is transferred to Dil Foods, and then the agreed-upon share is transferred to the restaurant partners on a weekly basis. Restaurants that have been associated for a longer time typically receive a higher volume of orders per day, ranging from 80 to 100 orders per outlet.