Arpita Aditi’s Dil Foods: Changing the Food Industry One Virtual Brand at a Time

At a Glance:

Shark Tank India Season 3 Episode 5
Startup Name: Dil Foods
Founder: Arpita Aditi
Startup’s Location: Bangalore, India
Website: Dil Foods
Industry/ Business Segment: Virtual Restaurant Operator
Original Ask: ₹50 lakhs for 5% equity
Original Valuation Sought: ₹100 Crores
Funding Received: ₹2 crores for 2.67% equity
Valuation Received: ₹75 crores
Sharks Who Invested: Peyush Bansal, Vineeta Singh, Radhika Gupta, Ritesh Agarwal

TL; DR

Pros: 
- Innovative Model, fills a gap in the restaurant industry by empowering small restaurants through virtual kitchens.
- Offers consistent and hygienic regional Indian food through lyophilization technology.
- Demonstrated profitability with impressive revenue growth and clear financial projections.
- Strong background and understanding of the market and customer base.

Cons:
- Lyophilization limitation: Reheating food after dehydration might pose potential bacterial risks.
- Competition from existing and new entrants in the virtual kitchen space.

Overview

Dil Foods, a Bangalore-based startup, made waves in the hospitality industry when it was featured on Shark Tank India. Founded by Arpita Aditi in 2022, Dil Foods operates as a virtual kitchen, partnering with over 65 local restaurants in Bangalore and Hyderabad. It aims to enhance the profitability of low and medium-range restaurants by maximising their asset utilisation without additional investment. The business model, known as Dil Brands, focuses on creating virtual brands and managing daily meal operations to optimize the food business structure.

About the Founder - Arpita Aditi

Hailing from Ranchi, Jharkhand, Arpita Aditi, a biotech engineer from MIT, is the driving force behind Dil Foods. With her experience at Himalayan Drugs, Reliance Capital, and Swiggy, Arpita leveraged her expertise to establish Dil Foods. Her strength lies in her entrepreneurial vision, effective communication, deep understanding of the food industry, and negotiation skills. She co-founded Nutnbolt Business Solution in 2020 and currently leads Dil Foods.

About Dil Foods

Dil Foods is an umbrella brand that partners with small restaurants to deliver food from their 8 cloud brands. Dil Foods appears as 8 different brands on food delivery platforms like Zomato and Swiggy. They have a plug-and-play model for processing the food. The cooked food is packaged using Lyophilisation to help with standardisation and freshness. Dil Foods aims to establish a sustainable nationwide restaurant ecosystem and has empowered over 65 local restaurants in Bangalore and Hyderabad.

Dil Foods’ Products/ Services

Dil Foods operates eight virtual food brands, including Dil Punjabi (Punjabi cuisine), Aahar (South Indian cuisine), The Chaat Cult, House of Andhra (Andhra Cuisine), Bihari Bowl (Bihari cuisine), Bhole ke Chole, Chahwa (Snack and warm beverages) and Khichdi Bar, each offering an authentic taste of regional India. The company exists to solve the problem of a dearth of authentic regional Indian food.

The unique selling proposition (USP) of Dil Foods is its innovative model of operating as a virtual kitchen and partnering with local restaurants to create virtual brands focusing on regional Indian dishes. This model allows Dil Foods to stand out from its competitors by maximizing the utilization of resources and infrastructure of small and medium-sized restaurants.

Dil Foods’ Business Statistics

Arpita has managed to set up a profitable business as well as expanded organically keeping in mind all the factors that are important for scaling, growth and quality check.

Financial Highlights:

• Initial investment: ₹3.5 crores

• Annual revenue: ₹7 crores

• Average order value (AOV): ₹300

• Profitability: ₹87 lakhs for FY 23-24 (till Oct 24)

Dil Foods’ Unit Economics:

• Average order value: Rs.300

• 31% Restaurant margin

• 6% Packing cost

• 63% Gross margin
  
  Break down of Gross margin (63%)

  • 22% Swiggy, Zomato commission

  • 10.5% Marketing cost

  • 1% Logistics and miscellaneous

  • 1% Chef salaries

  • 28.5% Contribution
    
    Breakdown of contribution (28.5%)

    • 11.97% Salaries to the employees of Dil Foods

    • 4.88% Factory and utilities

    • 11.65% EBITDA

Feedback from the Sharks on Dil Foods’ Pitch

The Sharks were impressed by the unique model and Arpita’s entrepreneurial spirit, which led to a bidding war. They admired Arpita’s clear and visionary outlook for Dil Foods, her effective communication, deep understanding of the food industry, adaptability, problem-solving skills, and successful negotiation of equity stakes and investment terms.

Competitors for Dil Foods in India

Dil Foods faces competition from several other businesses operating in the same industry. Some of the main rivals of Dil Foods are EatClub, Bigspoon, Ghost Kitchens, Hygiene Big Bite, and Naaniz.

Dil Foods’ Funding on Shark Tank India

Dil Foods got ₹2 Crores for 2.67% equity in Shark Tank India, with a valuation of ₹75 Crores. Arpita's well-prepared pitch impressed the sharks, who offered their expert insights and experience. All sharks except Aman made a joint offer.

Useful Links

• Freeze-drying of food: definition, process and advantages

• Indian Cloud Kitchen Market by FY ‘26

• Restaurant Industry in 2023 A Look Ahead

Watch Dil Foods’ Episode

Beyond the Tank - Interview with Arpita Aditi, the founder of Dil Foods

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Dil Foods Promo code

Here is an exclusive Dil Foods coupon code for Beyond the Tank Community members:

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FAQs for Dil Foods

1. What is Dil Foods, and what does it offer?
   A: Dil Foods is a virtual kitchen that partners with local restaurants to offer various regional Indian flavours through eight virtual food brands, such as Dil Punjabi, Aahar, The Chaat Cult, House of Andhra, Bihari Bowl, Bhole ke Chole, and Khichdi Bar.
   

2. Who is Arpita Aditi, and what is her background?
   A: Arpita Aditi is the founder and CEO of Dil Foods. She is a biotech engineer from MIT and has experience with companies like Himalayan Drugs, Reliance Capital, and Swiggy.

3. What are the strengths of Dil Foods?

   A: Dil Foods' strengths include its innovative virtual kitchen model, partnerships with local restaurants, and a focus on increasing the asset and resource utilization of small and medium-sized restaurants.
   

4. Who are the investors of Dil Foods?

   A: Among Dil Foods' investors are Revant Bhate, Mount Judi Ventures, Arjun Vaidya, and V3 Ventures, in addition to the previously mentioned sharks.

About Shark Tank India

Shark Tank India, a reality show, offers aspiring entrepreneurs the chance to present their business ideas to potential investors, known as "sharks." Launched in 2009 in the United States, it has since been adapted globally, including in India. Contestants on Shark Tank India pitch their ideas to multiple sharks in a dynamic, high-stakes setting. If a shark expresses interest, they can make an offer and potentially become an investor in the showcased business.

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