Food tech startup Yumist shuts down, blames ‘dead end’ to high burn business model
Food startup Yumist, which competed against Foodpanda and Zomato, announced on Friday it was shutting its operations across Delhi-NCR. The company provided home-cooked meals starting at ₹100.
Food tech startup Yumist on Friday announced it was ceasing its operations in Delhi-NCR. The Gurgaon-based company, which competed against Foodpanda and Zomato, provided home cooked meals, starting at ₹100.
"We failed to raise the kind of capital that this business required while staying true to the customer problem. In hindsight, there's a bunch of internal and external factors that led us to this dead end," said the company in a blog post.
"From launching in a second city prematurely, or committing to a high growth, high burn model just because prospective investors wanted to see that back in 2015, or taking a tad bit too long to find the right business model, we made our mistakes. We learnt from these mistakes and recovered fast, but maybe not too fast," it added.
"Also, every company has a context in which it operates - the economic climate, investor sentiment, the sector one operates in. Essentially, there are external factors which one can't really control. 2016 onwards, food tech (in the manner the term is loosely used) had amassed a notoriety with investors and media and became almost a dirty word. We failed in all our attempts to fundraise since then, as investors wanted to wait it out," the blog post read.
The company is also offering customers refund of the balance left in YumCash wallet. Customers need to fill out an online form and share account details to get the refund. The company says the refund process would take "3-5 working days / depending on your bank."
Launched in 2014, Yumist was founded by former CMO of Zomato Alok Jain and Abhimanyu Maheshwari, a seasoned restaurateur. The company had raised $2 million in December 2015 in a funding round led by Ronnie Screwvala's fund Unilazer Ventures and investor Orios Venture Partners.
India's online food delivery market saw a growth of 150% in 2016 in comparison with 2015, according to a report by research agency RedSeer. Yumist's closure comes at a time when the food ordering market in India is seeing new entrants such as UberEats and Google Areo. Yumist's closest competitor Swiggy recently raised $80 million in Series E funding that was led by Naspers and also saw participation of Accel India, SAIF Partners India, Bessemer Venture Partners, Harmony Partners and Norwest Venture Partners which are the existing investors.