Daalchini Tech aims to cross Rs 100 cr ARR in the next 12 months: Prerna Kalra

Adgully has been turning the spotlight on the entrepreneurs who fought against all odds to bring their dreams to fruition in our special series – START-UP STARS. We at Adgully wholeheartedly support the ‘Vocal for Local’ movement and have been featuring numerous local/ homegrown businesses, brands, and Apps in the country launched in the last few years.

Daalchini, a pioneering full-stack retail-tech start-up, was founded in 2018 by ex-Paytm executives Prerna Kalra and Vidya Bhushan. Backed by Klub, India’s largest revenue-based financing company, the start-up has revealed that it aims to cross Rs 100 crore ARR in the next 12 months.

The founding team of Daalchini Technologies consists of Vidya Bhushan and Prerna Kalra, both of whom have significant expertise and background in the technology and payments industry.

Prerna Kalra, the co-founder and CEO of Daalchini, is a former Paytm Wallet Product Head and a silver medalist from the Institute of Management Technology (IMT). She has authored two papers and has a strong background in product management, having worked at Fino PayTech Limited and TCIL. Prerna holds a post-graduate degree in IT Systems & Operations and a B.E degree in Electronics & Communication.

Vidya Bhushan is an alumnus of IIM Ahmedabad and IIT Kharagpur with seven years of experience in IT companies. He has worked at top management levels in companies like Paytm, Jio Money, Ericsson R&D India, and Paysafe Group. His skills lie in operations, product management, and team building.

In an interaction with Adgully, Prerna Kalra, Co-founder, DaalChini Technologies, speaks at length about introducing smart vending machines offering frozen/ chilled meals, savouries, beverages, and desserts in India, how IoT has changed the F&B industry, the aim to cross Rs 100 crore ARR in the next 12 months, and much more.

What inspired the founding of your start-up, and what problem did you set out to solve?

Working as a full-time professional, it was a constant challenge for me to carry healthy food and snacks to work every day, thanks to my busy schedule. I barely had time to cook breakfast or lunch or mid-day snacks and would find myself craving fresh home-cooked food items. Food delivery simply got tiresome, expensive, and didn’t match my schedule between meetings, and one needed an instant or quick snacking option to match up long working schedules.

During one of my work visits to China, I came across vending machines dispensing almost every kind of fresh food item – from fruits to momos. While vending machines-based retail was so deeply penetrated in China, I still saw my father owning a mom-and-pop store in a Tier 2 city and finding it challenging to expand it to more locations.

Inspired by this and after coming face to face with this problem, it just clicked in my mind, hence, Daalchini was born. Prior to starting Daalchini, I worked in corporates like Paytm, Paytm Payments Bank, and FINO. I had experience in Product Management, Strategy, and Business P&L. I founded Daalchini Technologies along with Vidya Bhushan, my colleague from Paytm, in August 2017.

Daalchini Technologies started by becoming a distributor of fresh food from home chefs and tiffin services. With COVID-19, we adapted the solution to not only provide fresh food from recognised cloud kitchens, but also act as a platform for D2C brands to launch them through our network of phygital distribution points.

Could you provide an overview of your product/service and its unique features or benefits?

We help users save Rs 40 on delivery charges and 40 minutes of delivery time. Daalchini is the most cost-effective delivery option for customers, especially in Rs 99 categories.

Vending machines are not new in India; however, those cash-operated manual machines were found mainly at airports and large offices and had only 7Cs (chocolates, chips, cookies, cakes, colas, candies, cuppa) packaged food and beverages.

Self–service kiosks/ vending machines: The ‘Grab and go' trend is the new normal. It is gaining popularity as it saves time. Self-service kiosks are the best in terms of hygiene and have become a great source of revenue at a marginal distribution cost.
Contactless and cashless: Going cashless and paying by scanning QR not only ensures zero contact but also saves time. It ensures minimal errors and incidents of theft and optimises transparency, and safety.
IoT has changed the way we looked at the F&B industry: As a concept more than as a reality, the Internet of Things is taking the world by storm. The F&B industry has already started to embrace this trend, consequently becoming quicker, more streamlined, and more efficient.

How does your start-up differentiate itself from competitors in the market?

Our key values for the consumers include:

Convenience: 24x7 availability of items for snacking needed for customers within 200 meters through smart vending machines
Discovery: Explore new and upcoming brands and experience them through smart vending machines
Choices: Avail food and beverages in every category – frozen/chilled meals, savouries, beverages, and desserts
Instant: Instant gratification product without paying for delivery charges or waiting time for delivery

We employ a tech-driven, temperature-controlled supply chain that is not demand-driven but forecast-driven, led by machine learning-based projection tools. We have built a platform for brands and retailers to deliver under Rs 99 food instantly at zero delivery cost through autonomous retail outlets, including vending machines, smart fridges, and mobility retail solutions. We have also developed mini vending machines for buses and cabs.

Alongside enabling brands to sell their products through its smart vending solutions, Daalchini operates a franchise model to let people generate income by setting up their own smart vending machines and building smart stores in their preferred locations.

What milestones has your company achieved so far, and what are your future growth plans?

Daalchini Technologies was started with a vision to turn thousands of women into entrepreneurs and create an unparalleled distribution channel, which is both physical and digital through a network of automated kiosks.

Initially, after setting up the vending machines, cloud kitchens and tiffin services were not prepared for food items specific to vending machines. So, we started preparing our own checklist along with food consultants and food experts to find what it takes. This became our bible and rule book while onboarding cloud kitchens and tiffin services.

Particularly post-pandemic, customers were concerned about hygiene and safety. We launched our 100% contactless kiosk solution, which helped in further adoption.

As part of its commitment to serving 6-meals-a-day, Daalchini is creating a sub-99 food store to enable brands in all F&B categories (like Frozen, Chilled, Meal-kits, Snacks, Bakery, Immunity Boosters, Healthy/ Energy drinks, Yogurts, etc.) reach their targeted audience and help them scale fast across multiple geographies.

COVID-19 gave a little pause to our business but it only accelerated the demand for smart contactless vending machines in India. The growing awareness about food safety and hygiene helped us expand our business and acquire more clients in multiple sectors like manufacturing, colleges, schools, etc.

How has the start-up evolved since its inception, and what challenges have you overcome along the way?

We began our operations in January 2018 after developing the product for about 6 months. We grew from 2 kiosks to 50 in FY19, and from 50 to 200 in FY20. That’s when the pandemic hit the country and we had to pivot from 77% into corporate offices to a much larger scope of hospitals, manufacturing and pharma companies, in-transit options like cabs/ buses, and residential complexes.

In Q4 of FY21, we grew from 200 to 310 and are currently at more than 1600 machines across 45+ cities in India.

More than 90% of their vending machines are EBITA positive within 45 days.

How does your start-up contribute to the industry or community you operate in?

Daalchini has revolutionised the vending industry in India with its 6-meal-a-day concept. While the traditional vending machines only provide packaged snacks and beverages, Daalchini focuses on providing a complete assortment of Frozen/ Chilled Meals, Meal-kits, Snacks, Bakery, Immunity Boosters, Healthy/ Energy drinks, Yogurts, etc. Hence, we have partnered with cloud kitchens to enable them to cater to the daily on-the-go-snacking needs of customers in offices, institutions, etc.

We have partnered with home chefs who are running tiffin services and cloud kitchens to get home-style food for our vending machines. We have focused on the daily refilling of fresh food prepared on a regular basis.

Our meal boxes have details about the food, its manufacturing date, and the best-before date. We also mention the vendor’s name and the FSSAI license number of the vendor.

How much funding has the company raised, and from which investors?

Daalchini was started with bootstrapped funding from both founders in 2018.

In September 2022, Daalchini raised $4 million in the last series A round led by Unicorn India Ventures and supported by Artha Ventures Fund, VSS Investco, the investment arm of Vijay Shekhar Sharma, Founder of Paytm.

We have other renowned angel investors with us like Ajay Kaul (former CEO-Dominos India), Renu Satti (VP-Paytm, former CEO-Paytm Bank), Pradyumna Agarwal (Director - Temasek), Amit Lakhotia (CEO, Park+) and few more.

Who are your target customers, and how are you acquiring them?

We deploy our smart vending machines in offices, co-working spaces, manufacturing plants, factories, schools, colleges, co-living spaces, hotels, hospitals, etc. They are our target locations and customers.

We get inbound queries through calls, WhatsApp, emails, social media, and our website to set up vending machines at these sites from across the country. Apart from this, we run paid campaigns, marketing activities like influencer engagement, PR, brand collaborations, etc., to acquire new customers.

What are the major challenges the company faces currently?

Currently, there is no major challenge ahead of us, we are on the right track, growing steadily in terms of our offerings, tech, product, teams, etc.

Initially, after setting up the vending machines, cloud kitchens, and tiffin services were not prepared for food items specific to vending machines. We then started preparing our own checklist along with food consultants and food experts to find what it takes. This became our bible and rule book while onboarding cloud kitchens and tiffin services.

Particularly post-pandemic, customers were concerned about hygiene and safety. We launched our 100% contactless kiosk solution then which helped in further adoption.

As part of its commitment to serving 6-meals-a-day, Daalchini is creating a sub-99 food store to enable brands in all F&B categories (like Frozen, Chilled, Meal-kits, Snacks, Bakery, Immunity Boosters, Healthy/ Energy drinks, Yogurts, etc.) to reach their targeted audience and help them scale fast across multiple geographies.

What is the company’s growth plan and vision for the future?

Daalchini aims to cross Rs 100 ARR in the next 12 months. We had a staggering gross revenue surpassing Rs 25 crore for the fiscal year 2023.

The company also recorded a positive EBITA (Earnings Before Interest, Taxes, and Amortization) for FY23 for the food & beverage division, and recorded operating profit of 15% in consolidated financials. Also striking 86% of the vending machines are seamlessly en route to achieving full-asset value payback within a span of 11-15 months.

How does the company measure success, and what are its key performance indicators (KPIs)?

The company likely measures success through:

Financial Performance: Revenue growth, such as aiming to cross Rs 100 crore ARR in the next 12 months and the gross revenue surpassing Rs 25 crore for the fiscal year 2023.
Profitability Metrics: EBITA positivity within 45 days for the majority of vending machines and an operating profit of 15% in consolidated financials.
Expansion Metrics:The number of vending machines deployed and the geographical spread across cities, with a current count of over 1,600 machines across 45+ cities.
Customer Acquisition and Retention: The number of inbound queries and the success of marketing campaigns in acquiring new locations for vending machine deployment. We have more than 3 lakh visitors on our website and 5 lakh monthly active uses of Daalchini.
Product Adoption:The rate at which new brands join their platform and the variety of food categories offered through their vending machines.