Indonesian Cloud Kitchen Startup Legit Group Bags $13.7m Led by MDI Ventures
Indonesian cloud kitchen startup Legit Group has announced raising $13.7 million in a Series A funding round led by MDI Ventures and participated by Sinar Mas Digital Ventures (SMDV). East Ventures, and Winter Capital.
Legit Group had previously raised a $3-million seed round in September 2021 lead by East Ventures.
The company will use the fresh investment to fuel its expansion plans outside the Greater Jakarta Area. Founded in 2021, Legit Group operates four food and beverage brands - Pastaria, Sei'Tan, Sek Fan, and Ryujin - in over 30 locations mostly in Jakarta.
Legit Group runs a full cloud kitchen business model without any offline presence. The company claims to have seen strong traction since its seed funding round in 2021, with sales surging about three times.
"We are thrilled to have strong group of investors supporting us in creating F&B infrastructure that carries the vision of 'Food for Everyone'," Bram Hendrata, chairman of Legit Group, said in a statement.
Hendrata is also a founder and CEO of Ismaya Group, a prominent lifestyle and hospitality player in the country that operates 18 F&B brands.
"Through the new funding, Legit Group will strengthen its commitment to bringing more food to various places while continuing to innovate and improve the technology we have to achieve a more efficient operating system," Hendrata added.
The company said that it has seen the potential of new-generation F&B tech that focuses more on developing brands by applying technology to maximise profits. This focus will provide a competitive advantage in the cloud kitchen market.
MDI Ventures CEO Donald Wihardja said, "Their [Legit's] ability to develop innovative product and marketing strategies makes MDI Ventures increasingly confident that our support as a major investor will strengthen their position in the F&B industry and accelerate their business growth."
The Indonesian online delivery market is projected to reach $10.81 billion in 2023, according to Statista, and record a CAGR of 21.30% during 2023-2027. Its market volume is expected to reach $23.4 billion in 2027.
Stable demand and opportunities for online food delivery have given birth to a slew of cloud kitchen startups in the country. With its light asset model, cloud kitchen has benefits such as lower operating costs and maintenance than regular dine-in restaurants.
Besides Legit Group, some well-known cloud kitchen companies are Dailybox, which raised $24 million last June led by Northstar and Vertex, and Hangry, which bagged $22 million in April 2022 from various investors, including Journey Capital Partners and Alpha JWC Ventures.