Reason Why Indian VCs Are After Food Tech Startups
BANGALORE:Food startups are certainly turning up the heat as they invariably seizing the attention of investors and media.
Behind every rumbling belly is a hidden craving for a particular dish and since the desirable food is just a click away. The rise in consumerism has led to transition of a new level of in the food business. With the strong economic background with relatively better incomes are encouraging Indian to gorge on restaurant food like never before, reports, YourStory.
This surge in the new age food-tech startup has not only been graced with customers, but has received major backing from the investor community.
Food services are reported to be a $50billion market with a 16-20 pct growth year on year. According to Anshoo Sharma, the emerging food startups attribute the growing investor interest to several reasons mainly contribution to the massive market serving as the focal means of daily life. Due to the frequent behavioral pattern of ordering it leads to the brand creation thereby creating strong value of a customer for a long period of time.
“There has been a lot of investment/action in the food space in the U.S. such as GrubHub, Sprig, and Munchery etc. VCs in India typically tend to fund copy-cat models much more easily than novel ideas. Given excessive heat in this space in the U.S., a lot of VCs are trying to place their bets in India before it gets too late “said Alok Goel, CEO, New Businesses, Freecharge and Advisor and Investor at TapCibo
“At this time, VCs are not sure of what will work. Hence, they are adopting spray & pray approach. They will put small amounts of money in many startups. Over time, they will decide which team to back long term. It means many food tech startups will go out of business in the next few quarters.” he added.
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