Bengaluru-based virtual restaurant operator, Dil Foods, has successfully raised $2 million in a Pre-Series A funding round led by V-cube Ventures and Mount Judi Ventures. Dil Foods operates on an innovative asset-light model, leveraging the existing but underutilized infrastructure of partner restaurants to manage the last mile of cooking and distribution, while focusing on business operations, supply chain management, branding, and marketing.

Arpita Aditi, the Founder and CEO, explained that the company excels in creating diverse brands, designing menus, determining pricing, and developing attractive packaging. Dil Foods then collaborates with local restaurants possessing suitable infrastructure to handle orders, ensuring that the entire supply chain is well-managed to maintain quality and consistency across its outlets.

Currently, Dil Foods operates eight successful brands and has joined forces with 54 local restaurants in Bangalore and Hyderabad. The raised funds from this funding round will predominantly be deployed to expand the company’s presence and launch new brands. “We will be expanding both vertically and horizontally, which includes launching six new brands and introducing our services to cities such as Chennai, Pune, Mumbai, and Delhi NCR within this financial year,” said Arpita Aditi.

Dil Foods specializes in authentic regional cuisine that is commonly consumed on a daily basis. The upcoming brands will continue to focus on providing such cuisine, offering a diverse array of 220 SKU’s across their existing brands. The company selects restaurant partners based on their level of underutilization, regardless of whether they are small, medium, or national chains. As Arpita Aditi explained, “If they are underutilized and seeking additional income, we will undoubtedly consider them for collaboration.”

Regarding its revenue model, Dil Foods collaborates with restaurant partners under a fixed pay-per-SKU arrangement, providing partners with a 40% profit margin on each item sold through the platform. Currently, their products are available through popular delivery platforms like Swiggy and Zomato.

Arpita Aditi further elaborated on their revenue sharing process, explaining that after deducting the commission, the remaining amount is transferred to Dil Foods, which then shares the agreed-upon percentage with restaurant partners on a weekly basis. Restaurants that have been associated with Dil Foods for a longer time typically receive a higher volume of orders per day, ranging from 80 to 100 orders per outlet.