Fire in the belly

Food-tech start-ups have given a new meaning to finger food. Now you can not only eat but also order with your fingertips. In the convenience economy in which technology is disrupting every business, food delivery is no exception. In India, the rush began in 2014, when a host of start-ups decided to exploit the ease-of-ordering gravy train even as investors went about funding just about everyone. But the euphoria was short-lived. Once the money started drying up, so did the start-ups — the next two years saw two dozen mergers and acquisitions and several start-ups shutting shop.

Among the last standing now are Swiggy and Zomato. Today, both players are battling it out for supremacy, raising capital across multiple financing rounds. But the rules of the game are changing with the delivery players looking to control their entire value chain through the cloud-kitchen model. In a business where companies are still losing money on every order, it means more cash burn. But investors are not losing sleep just yet. They believe that, in a winner-takes-all market, Swiggy definitely has the edge. Its execution certainly scores over its competitor but, more importantly, the Swiggy brand has become a verb.

No wonder then Naspers wrote the biggest cheque it has ever cut in India for Swiggy. While the cost economics is still not in favour of Swiggy, what the investors are betting on is that it is solving a huge pain point and catering to a fast-expanding market as more Indians start to eat out. But then, till it hits the inflexion point when the economics turns positive, Swiggy has to ensure the funding tap doesn’t run dry. Our cover story, looks at what’s cooking at the youngest food-tech unicorn.

We also explore how the ubiquitous Indian beverage — chai — is finding a new following with start-ups stirring up the space with their distinct offerings and competitive pricing. In Strategy, read how Bollywood has China dancing to its tunes.