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Startup founder shares harsh reality of running cloud kitchens
Zippee founder Madhav Kasturia said that at one point, he had a cloud kitchen business, but he would never do it again.
Startup founder reveals challenges in cloud kitchen business model
He explained that he had realised the industry demand and what it gives back to entrepreneurs.
“I ran a cloud kitchen for almost 6.5 years but I will NEVER do it again!!” he shared on LinkedIn.
Then he elaborated on how people believe the cheat code for a cloud kitchen is food + delivery = profit. “Cute theory!” he remarked.
However, the reality is far from the perceived theory.
“Here’s what actually happens,” the startup founder wrote.
He gave some pointers:
→ You build a brand no one remembers because Swiggy lists you like detergent
→ Aggregators like Swiggy/Zomato take 25–30% commission off every order
→ You become a slave to logistics; soggy packaging, 1-star reviews, Zomato payout cycles
→ Also, FYI, 25–30% of cloud kitchens in India shut within a year
Then Kasturia remarked that a “chaiwala” outside his old outlet pulls in ₹3L/month with 0 CAC or coupons but loyal customers and perfect tapri tea.
“Not romanticizing tapris here but they get food better than most funded kitchens do,” the founder said.
“Remember “Swiggy Daily” and “Zomato Everyday”?” Kasturia asked.
“Subscription meals that promised convenience? They failed spectacularly because customers didn't want the same bland meals all week,” he reasoned.
“I’m not anti-cloud kitchen,” he added. “I’m just saying: it’s harder than it looks.”
He advised upcoming cloud kitchen founders: “Before you jump into the next delivery-only model, go spend a week in a tapri.”
According to Kasturia, an entrepreneur can learn more from a “tapri” than any pitch deck can teach him.
“Because great food businesses don’t just scale but also stick,” he concluded.
Several LinkedIn users resonated with the Zippee founder's post.
About Zippee
Madhav Kasturia founded Zippee in 2021. Backed by VCs & founders of India's largest unicorns, Zippee is India’s first quick commerce logistics platform for e-commerce brands, which is currently valued at ₹ 176 crore.
Brands can connect their online stores to Zippee and kickstart quick-commerce delivery via its network of dark stores & last-mile fleets across India.