Running a business is similar to climbing a mountain. Every turn opens up a new vista and every bend has something in store for you,” says Jaydeep Barman, CEO and co-founder of Rebel Foods, a cloud kitchen company with more than 15 food brands operating in India, the UK, UAE and Indonesia. Valued at over $800 million (around ₹6,000 crore), it runs 350 plus kitchens globally.
Barman, 46, claims he has seen business presentations of food-tech companies in Brazil and the US stating they aim to be the Rebel Foods of that region. The pandemic certainly did not stop their march. In April, the Mumbai-headquartered company raised $50 million from US-based hedge fund Coatue Management. Two months ago, it started operations in London, and is also eyeing the “unicorn” tag with a $1 billion valuation.
Today, its workforce of 4,500 employees includes managers, chefs and engineers who specialise in robotics and mechatronics. In fact, during the lockdown, the company piloted an automated quality control machine that checks each dish to assess temperature and texture before delivery. It has also got a licence to run a US-based burger chain out of its kitchens. “There’s an old adage—never let a crisis go to waste,” Barman says.
It took 14 years to achieve this scale, though Barman wears his success lightly. During the Zoom interview, he speaks not just of his entrepreneurial milestones but his passion for mountaineering, an activity he took to in the mid-1990s, when he was studying production engineering at Kolkata’s Jadavpur University. Friendships fostered by bunking classes and planning trips to the mountains endure to this day: “We are 10 of us. We still meet for climbing expeditions, with people flying in from different corners of the world. I don’t think there could have been a better group of friends ever.”
Reminiscing about those days, when he followed up engineering with an MBA from the Indian Institute of Management, Lucknow, Barman doesn’t recall being ambitious or having any entrepreneurial inclinations. “You have to know this—we are Bengalis. We are lazy by nature. And we don’t understand profit. My father is a recently retired professor. My mother is a maths teacher. I was not hard-working as such, and college meant having fun and playing football. I didn’t even get a good job after IIM,” he says with disarming honesty. The engineering-MBA route was a tried-and-tested formula for job security.
In 2001, he joined the electronics company Onida and was posted to north Bengal, where he tried to sell television sets in a region plagued by power cuts. “It felt like I was wasting my life. I had to do something about it,” he says. In 2002, he joined a Pune-based startup, Brainvisa Technologies, which sold e-learning management systems to companies. Barman, posted to the UK to scout for business prospects, says, “It gave me an understanding of freedom to do whatever I wanted to do and a responsibility to deliver.” The experience planted the seeds of entrepreneurship. But he began missing home food.
In 2004, he returned to Pune when his new-found interest in entrepreneurship and a longing for the flavours of Kolkata birthed a business idea. He partnered with a co-worker, Kallol Banerjee, also from Kolkata, and tried to recreate rolls from the streets of their home city in a quick-service restaurant (QSR) format, inspired by the success of McDonald’s and Domino’s, which had launched here in the mid-1990s. “We examined the foods they offered. A burger has two bases with a filling in between and pizza is a base with a topping. Rolls have a similar concept. There’s a base with filling and it is familiar to the Indian palate. So, why can’t it be sold like a McDonald’s burger or Domino’s pizza?” he says. “We weren’t thinking too big at that time.”
The partners self-funded the first outlet, Faasos, on Pune’s Dhole Patil Road. Within three months, they opened a second one in Aundh. Barman quit his job. The outlets were profitable but they didn’t know how to scale up. Fourteen years ago, funding from venture capitalists and angel investors for a small business wasn’t the norm. Besides, he had recently got married. “I was under financial pressure and exhausted. So, I took some time off,” he says. So did Banerjee. Faasos was franchised to two friends.
In 2005, Barman enrolled at the INSEAD business school, going on to join the consulting firm McKinsey in London in 2006. By 2010, he was an associate partner. That year, he took a six-month sabbatical, returning to India because he wanted to raise his daughter here. By then, he knew how to build businesses and decided to take Faasos pan India.
In 2010, Jubilant Foods, which owned Domino’s, had gone public. Barman saw this as an opportunity to explore the QSR space for Indian fast foods like the rolls they offered. “In some sense, Faasos was quite similar to Domino’s. Both were small-format, delivery-focused and later technology-oriented. They gave us the motivation and inspiration to scale up,” he says. In 2011, Banerjee and he got together to raise $2 million from Sequoia and open 18 outlets across Pune, Mumbai, Bengaluru, Chennai, Delhi and Ahmedabad. Barman made Pune home; the firm was headquartered in Mumbai.
The team expanded to about 50 and the partners tried to hire people with 10-15 years of experience in the QSR sector for their senior management. It didn’t work. They needed fresh ideas, while their leadership team was bogged down by the baggage of experience.
“I could sense that we were not pushing boundaries. We were not building something that we would be proud of. It is very difficult to get ownership and experience together. We knew the best people at Domino’s would not come to us. So we decided to double down on ownership and decided that the experience would come along the way.”
They let go of four team members and launched the Faasos Entrepreneur in Residence (FER) programme to hire people who would bring new ideas and a sense of ownership to the table. Eight people were picked in two rounds—five are still with the company. One is now the CEO of Rebel Foods India, another the CEO of Rebel Foods Indonesia. The three who left started their own companies; Barman has invested in them. “I am very proud of that contrarian decision of getting people who are entrepreneurs by heart, even though they don’t have experience or a lot of knowledge of food companies. They changed our company,” he says.
Between 2011-15, Faasos launched a phone app and the website became more technology focused. Food tech had become a robust space for new businesses. In 2015, Zomato introduced its delivery app; Swiggy announced its arrival as the only home-grown food app platform.
Faasos, which had expanded to 50 outlets, focused on cities like Delhi, Mumbai, Hyderabad and Chennai. Rents, however, were exorbitant. “India has the highest rent-to-sales ratio in the world. Unless one has deep pockets, like Domino’s, one can’t build a QSR business in India,” says Barman. It was when they were looking at ways to cut costs that they realised 75% of their orders came from delivery. A survey showed 73% of the customers knew their brand, but hadn’t seen the outlets. “It was a light-bulb moment for us. If people are willing to order our products without seeing our outlet, a model similar to buying clothes and books online, food could be completely sold online too.”
They closed their outlets, booked kitchen spaces on industrial estates with lower rents and started “internet restaurants”. The term cloud kitchen wasn’t as popular as it is today. “Nobody at that time was thinking like this. But we saw something in the data and then said let’s do it, which transformed our company.”
The company diversified, launching brands like Behrouz Biryani and Oven Story. “It was another light-bulb moment. We could launch brand after brand after brand from the same kitchen. It completely transformed our economies and how we built the business.” In 2015, they raised $20 million from Sequoia, Runet and Lightbox to pivot to cloud kitchens.
“We proved the cloud kitchen model works by piloting it in Mumbai. The data indicated this as well. As a company, it’s in our DNA to do pilots and offer proof of concept before claiming victory,” he says. In 2018, Faasos was renamed Rebel Foods. In 2019, it expanded overseas, setting up the first outlet in Indonesia, followed by the UAE and UK. “Some of our brands travel globally as concepts, though we tweak the menu and taste profile to fit local preferences.” Among them are Behrouz (biryani + Indian), Mandarin Oak (Chinese + pan Asian), Oven Story (pizza), Sweet Truth (desserts) and Faasos (wraps). They launched local brands: Banzai (Japanese) in Indonesia, 500 Calorie Project (Healthy) and Sawa (Lebanese) in the UAE.
“The international business has grown significantly during covid. We are at about 160% compared to pre-covid in markets like Indonesia and UAE,” he says.
The pandemic opened up new business avenues as brick-and-mortar food outlets shuttered. Moving beyond in-house brands, they started Rebel Launcher, inviting food companies whose outlets had closed to operate from their kitchens. Brands like Naturals Ice Cream, Mad Over Donuts and Anand Sweets in Bengaluru are now delivering from their kitchens. “If you place an order for Naturals via Swiggy, chances are the order is landing in our kitchens. It was a tremendous business opportunity that we saw coming out of the pandemic. We were hit significantly but we have recovered around 90%.”
In the early days of the lockdown, sales had slumped by 70%. They could have cut jobs. But they organised a virtual townhall, seeking solutions. Barman says, “You can’t imagine the kind of answers we got. People went out of their way and came up with productivity analysis, new ideas to sell things that were most in demand at that point of time. People were willing to take salary cuts so that we don’t have to cut jobs. It felt like we were in the trenches like a band of brothers.”
They took a pay cut for three months; area managers, quality control and kitchen staff were spared. They re-examined expenses. “If you look at our P&L, expenses include raw material, rent, delivery and energy. We asked teams to cut costs to prevent layoffs and people responded wholeheartedly.”
Rebel Foods has hired 20 engineers over the last four months to automate the cooking process and maintain quality. “Food can never be entirely science. It is a creative process but science helps it to scale,” says Barman, who intends to use technology to standardise biryani and take it all over the world. “While it is made in India, it can be recreated in London through technology. That’s what we mean. Technology will replicate processes, it will not replace people.”
How do you take care of yourself?
I am an exercise freak. I cannot be out of shape. I run 5-10 kilometres every morning.
When is your next mountaineering trip?
In April, I plan to spend 20 days to summit Mera peak in Nepal.
What's on your Kindle now?
University of Berkshire Hathaway: 30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting by Daniel Pecaut and Corey Wrenn and Sacred Summits by Peter Boardman.
Note: The promoters of HT Media Ltd, which publishes Mint, and Jubilant FoodWorks are closely related. There are, however, no promoter cross-holdings.
The story was updated at 11:25 am. The valuation and number of kitchens was revised.