Jaydeep Barman is as frank as the day, when it comes to narrating his entrepreneurial journey. The co-founder and CEO of Rebel Foods candidly admits that their flagship restaurant brand – Faasos (Fanatic Activism Against Substandard Occidental Shit) got its name as a result of a drunken conversation; and doesn’t shy away from calling himself and the company’s co-founder, Kallol Banerjee, “lazy Bengalis.” In a similar matter-of-fact tone, he recounts how an epiphany changed the fortunes of their company forever.
Barman and Banerjee planted the seed for the venture in Pune and gradually expanded to Mumbai, each set up with an investment of Rs.1 million. American venture capital firm Sequoia’s $5 million funding in 2011 helped Faasos expand its operations further. By 2013, the duo had opened up about 50 small format restaurants in the two cities. These restaurants primarily served a variety of Kolkata’s famous rolls, and 80% of their business came through in-house delivery orders. While it reportedly clocked revenues to the tune of Rs.270 million, high rental costs (20% of total revenue) led to losses worth Rs.150 million.
Barman recalls, “In 2014, we asked a simple question to our customers, ‘Have you seen our outlet?’ Surprisingly, a whopping 74% said they hadn’t.” That served as a ‘eureka’ moment. They realised they could do away with visible façade and shut down high-street stores. Thus, Faasos set up its first ‘cloud kitchen,’ also known as ‘internet restaurant’ in Marol – a suburb in Mumbai. This enabled the company to tap into the catchment area in the neighbourhood without the high rental cost. Since then, sales grew 4x and profits have seen a sharp northward trend.
“We could afford larger kitchens at a fraction