- Indonesian cloud kitchen startup Hangry has raised $22 million in debt and equity financing.
- The firm says it has grown amid COVID-19 lockdowns and the growing acceptance of delivery apps.
- Hangry has 84 outlets in six cities and expects to have 132 outlets in 10 cities by the end of 2022.
In mid-March 2020, when the Indonesian capital Jakarta went into lockdown, local startup Hangry saw its revenue drop by a third, CEO Abraham Viktor told Insider.
Hangry is a “virtual restaurant” startup, cooking and serving food from commercial kitchens, primarily for delivery apps like Grab from Southeast Asia. The idea is to take advantage of the huge demand for food delivery without incurring all the costs associated with owning and operating a physical restaurant in a fancy location.
The Jakarta-based startup, only about four months old, had relied on Indonesia’s thriving food delivery networks. It owns and operates several brands catering to different cuisines, such as Japanese beef rice bowls, Indonesian food, and Korean fried chicken.
When COVID-19 swept through the city in early 2020, Jakarta residents cut back on online food ordering because they wanted to avoid being infected by delivery men and drivers. “We have never seen a threat during our existence, because we were very new, it was always an upward trend for us,” Abraham said.
The trend has eventually reversed, Abraham said, in line with Uber and Deliveroo in the UK reporting surges in food delivery orders as people in lockdown, bored with home cooking, turned to apps.
“And that’s when we all felt relieved, thinking, ‘We can still exist,'” he said.
Indonesia is the world’s fourth most populous nation and 10th largest economy in terms of purchasing power parity with a rapidly growing middle class, according to World Bank estimates.
Hangry occupies a space in this broader ecosystem that it says is relatively unchallenged, as “there hasn’t been a very strong incumbent cloud kitchen player in Indonesia, especially when compared to established food and beverage markets like the USA,” the CFO said. Wenyou Tan.
Additionally, Hangry caters only to the brands it owns, rather than allowing other restaurants to use its facilities and services, Tan and Abraham said. In this way, it is a “full-stack” player that not only runs its own operations, but also manages its own brands. It has also started serving customers at its first restaurants for dinner, they said.
Investors poured $22 million into the company in mid-April through a mix of equity and debt funds, bringing Hangry’s Series A funding to $35 million, according to a statement from one of Hangry’s investors. The equity financing portion was handled by new investor Journey Capital Partners, with participation from Orzon Ventures, Sassoon Investment Corporation (SassCorp), and other existing investors, including Alpha JWC Ventures as one of its early institutional investors.
With the investment, Hangry will buy food and beverage brands in Indonesia, Abraham said. Until now, it has been able to gobble up brands to diversify its offerings, he said. As recently as January, it had just four brands, and three months later, it expanded to seven, bringing Indian cuisine and a pizzeria, Abraham said.
The startup is also investing in its customer service.
“If you’re in a restaurant and there’s something wrong with your order, you can just raise your hand and someone will come over to you. But for cloud kitchens that rely on food delivery, it’s very hard to complain,” he said, and he added. : “Recognizing that, we make sure that customers complaining is very, very easy.”
Hangry currently has 84 outlets in six cities in Indonesia. By the end of 2022, it expects to have up to 132 outlets in 10 cities and food categories.
“The more categories we are in, the more belly we share,” Abraham said.
Take a look at the pitch deck Hangry used for his latest funding round below: