In response to the increasing demand in the cloud kitchen and food delivery sectors, Speed Kitchen is a platform that provides food entrepreneurs with ready-to-use commercial kitchen spaces. It is a co-working cloud kitchen offering fully furnished kitchens, permits, and infrastructure that help business owners cut down on the upfront expenses and difficulties of starting a commercial kitchen. According to Speed Kitchen founders, Speed Kitchen is like WeWork for Cloud Kitchens. Speed Kitchen is available across four cities, with 15+ locations, 130+ kitchens, and 50+ clients.
Paurav Rastogi and Shamin Kapoor co-founded Speed Kitchen in March 2021. The equity split are between Paurav Rastogi (70%), Shamin Kapoor (13%), ESOP (4.28%) and Investors (12.72%).
Speed Kitchen brand model
Speed Kitchen offers its space as –
- Operational 24×7 and 365 days open
- 100% Complaint and Hygiene
- Ready to move in
- Plug and Play Model
- Speed Kitchen takes care of the maintenance of the kitchen premises
Speed Kitchen’s revenue model involves a minimum guarantee and revenue-sharing agreement. Revenue sharing is capped at 1.5x -2.5x of the minimum guarantee. Revenue sharing is also based on net sales between 6% and 10%. Speed Kitchen has been profitable since its inception with a Return of Capital Employed of 15%-18%. Speed Kitchen’s lease tenures with landlords are 3 years, 5 years, and 9 years, with a minimum lock-in period for brands of 1 year. Speed Kitchen allows brands to operate multiple sub-brands from a single kitchen. Movable equipments are arranged by the brands themselves. Speed Kitchen provides civil work, including CCTV, WiFi, Gasbank, Plumbing, security, facility manager, and garbage disposal. Speed Kitchen’s steps for launching a kitchen involve scouting a suitable location and analysing key metrics, such as population density, Average Order Value (AOV), and Rider availability.
Statistics for Speed Kitchen
Annual Sales of Speed Kitchen for FY 21-22 (₹36.5 Lakhs), FY 22-23 (₹1.51 Crores), FY 23-24 (₹3.25 Crores), FY 24-25 (Till Oct) (₹3 Crores). The projected sales for FY24-25 are ₹ 5- 5.5 Crores. The EBITDA for FY 23-24 was (~13%), with a net profit of 9.4 %. Speed Kitchen unadjusted EBITDA for FY 23-24 (4.5%), net profit ~25%. Speed Kitchen has signed a contract with ITC and is expected to generate ₹7.5-₹8.1 lakhs monthly in revenue.
Speed Kitchen in Shark Tank
In Shark Tank Season 4, Episode 7, Speed Kitchen enunciated the challenges of building a food brand-
- Finding a good place with Commercially Compliant Space
- Building good infrastructure
- Getting licences
- Kitchen operations
Sharks offer, and counter offers for Speed Kitchen
Speed Kitchen asked ₹2 crores for 3% equity at a valuation of ₹66.67 Crores. Sharks Ritesh and Azhar offered ₹2.5 Crores for 10% equity at a valuation of ₹25 Crores. Shark Kunal’s offer 1 was 2 Crores for 8% equity at a valuation of ₹25 Crores. Kunal’s offer 2 was ₹2.5 crores for 10% equity at a valuation of ₹25 Crores. Shark Aman’s offer was ₹2 Crores for 10% equity at a valuation of ₹20 Crores. Speed Kitchen’s counter offer was ₹2 crores for 4% equity at a valuation of ₹50 crores. Speed Kitchen accepted a combined offer of ₹2 crores from Sharks Azhar, Ritesh, and Kunal for 6% equity, totaling ₹33.33 crores in valuation.
If Speed Kitchen keeps coming up with new ideas and overcomes the difficulties of growing, it has a lot of room to grow. By emphasising partnerships, customer-centric solutions, and technological advancements, it can become a leader in the cloud kitchen infrastructure sector.
