In another foray into a synergistic business, Oyo wants to promote its own cloud kitchens, which will serve the twin purpose of serving the Oyo-run properties and supplying through the online food order delivery companies like Swiggy and Zomato. Oyo reportedly feels this could complete its portfolio as a hospitality chain that offers a complete suite of products. According to a report in Mint, the food from these cloud kitchens could help Oyo standardize the offerings across its properties, something top hospitality chains would strive for.
A pilot ‘Adrak’ brand cloud kitchen is already on stream and if found successful, it could be expanded. Beyond the above-mentioned objectives, this cloud kitchen route and the food prepared and supplied through them will also offer a new revenue stream for Oyo as well as to the hotels under their management. Oyo has not directly acknowledged any of these except to confirm that food and beverages (F&B) contribute around 25% of the company’s revenue.
One interesting point with Oyo at this stage is the company does not have any dearth of funds to venture into any new area of business whatsoever. Only recently it has raised $1 billion and another around $200 million under its Series E funding. With diverse verticals within the hospitality and property management business, like home rental, co-working and co-living segments, besides its hotels and townhouse offerings, the launch of the cloud kitchens business must be a breeze for the company.
Some observers feel the impetus to get into the food business has come through some of the investors in the company, like SoftBank. They point out how many startups grow into different entities over a period and appear quite different from their original shape when they started out. Additional business get attached in the course of their journey and Oyo’s case is no exception.