<article>Online food company Food Vista India Pvt. Ltd, which that operates as <a style="color: #000080;" href="http://freshmenu.com/" target="_blank">FreshMenu,</a> is in advanced stages of closing a funding round worth $20 million, according to two persons directly involved in the transaction.</article>

Online food company Food Vista India Pvt. Ltd, which that operates as <a style="color: #000080;" href="http://freshmenu.com/" target="_blank">FreshMenu,</a> is in advanced stages of closing a funding round worth $20 million, according to two persons directly involved in the transaction.
The new round will see participation of existing investors as well, said the two persons, who didn’t want to be named. The company raised $5 million in a Series A round of funding from Lightspeed Venture Partners earlier this year.
The Bengaluru-based company, founded in 2014 by Rashmi Daga, is looking to expand its infrastructure, improve technology and hire larger teams, Daga said over the phone, confirming that the company is raising funds. She declined to comment on the amount.
Daga plans to set up 100 kitchen facilities across Bengaluru, Mumbai and Delhi. The company is seeing a month-on-month jump of 30% in the number of orders and 25% in its user base.
Some food-tech start-ups have been struggling as investor interest in the space begins to wane, making it difficult for them to raise new rounds of funding. Within the food-tech business, so-called full stack companies such as Food Vista that make their own food in centralized kitchens and deliver to customers, are faring better.
One of the primary reasons for this is that such companies are able to control the quality of their products and keep costs down. “We are very cautious about our marketing spends, which are very low and targeted. Customer acquisition costs would be around Rs. 100 (each) and the food is not discounted,” said Daga.
This year, <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Holachef">Holachef Hospitality Pvt. Ltd,</a> which started out as an aggregator and raised $3.1 million in a funding round led by Kalaari Capital, switched to a centralized kitchen model. It is now in talks with investors for a fresh round of funding.
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“Aggregating food will be difficult. Eventually, the challenge would be that regulations will come in where chefs won’t be able to operate out of homes; hence, we have set up our facilities where chefs can come in, cook and leave,” said Saurabh Saxena, co-founder of Holachef.
This is a model that InnerChef Pvt. Ltd, which raised Rs.11 crore in September from a group of angel investors, and Yumist, which raised $1 million from Orios Ventures, have followed from day one.
“In terms of margins, online restaurant businesses fall in the range of 40-65% as compared to 10-15% for food aggregators and 2% for food delivery companies,” said Rajesh Sawhney, co-founder of Innerchef.
The online food ordering business in India is still nascent. The organised food business in India is worth $48 billion, of which food delivery is valued at $15 billion, according to data by India Brand Equity Foundation.
“These businesses are supply-led models, most of them would have to scale to 100-200 kitchens to serve demand and these kitchens would need capital investment. Also, since food cannot be exchanged or replaced after delivery, unlike other products, companies would have to be very careful about perishability and logistics,” says Anand Lunia, founder, IndiaQuotient, an early-stage investment fund.
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Online food company Food Vista India Pvt. Ltd, which that operates as FreshMenu, is in advanced stages of closing a funding round worth $20 million.

India: FreshMenu to raise $20m to expand infrastructure

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