Sequoia-backed Rebel Foods, which runs a chain of cloud kitchens, saw its losses increase 55% in FY22 to Rs 564 crore from Rs 364 crore in the previous fiscal on the back of increasing expenses which jumped 86% to Rs 1,429 crore.

However, the company – which operates Faasos, Behrouz Biryani and Oven Story, among others – saw its operating revenue more than double to Rs 859 crore from Rs 406 crore, regulatory filings showed.

Of the total expenses of Rs 1,429 crore, input costs were the biggest, at Rs 446 crore in FY22 — more than double Rs 200 crore spent in FY21. Employee benefit expenses, advertising and marketing spends and commissions paid to other selling agents, like Swiggy and Zomato, were the other areas where Rebel Foods saw its expenses nearly doubling in FY22.

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The company also has its direct-to-consumer (D2C) channel, which it enables through EatSure – its own food delivery app. It operates over 450 cloud kitchens in India and other international markets

Rebel Foods aims to save costs by renting buildings away from hotspots, in the interiors, since orders are only prepared and shipped from there and no one dines in, co-founder Raghav Joshi told FE.

Joshi added that the company’s average order value (AOV) was about Rs 400-500 and its three biggest order generators, out of the 20-plus brands it operates, were Behrouz Biryani, Oven Story and Faasos.

The Thrasio-style startup acquired four companies in 2022. Rebel Foods had earlier said it has earmarked about $150 million to acquire roughly 40 brands.

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Cuisines such as premium north Indian, south Indian, Indian sweets, sandwiches and ice creams, where Rebel Foods does not have a presence, will be the top aim for the company and are “important to have” for its growth. Totally, Rebel Foods plans to be present in about 30 cuisines but currently has presence only in 12 cargoes or so.

Asked the top categories where Rebel Foods was losing money, Joshi said: “Platform-level technology, automation efforts and scaling up the company’s data science capabilities are where we’re investing heavily.” He added that using robots to toss noodles in a wok has reduced the company’s food preparation time by about 20-25%, similar was the case after Rebel started using fully automatic machines that cook French fries, reducing human intervention to ensure the taste across all its cloud kitchens remains uniform.

The Mumbai-based firm has so far raised over $500 million from Qatar Investment Authority, Sequoia, Lightbox and others and is valued at about $1.4 billion. Around October 2021, it said it plans to go public in 18-24 months.

“The reason we’re unprofitable is largely because we have invested in a lot of tech and product folks. We should become profitable in the next 12-18 months for sure. That is irrespective if our IPO plans plans are there or not. The work on the IPO has already started, in terms of compliance and how the structure should be,” Joshi added.