Gurugram’s Good To Go poised to snap up TenderCuts of Chennai
From seeing 3x and 4x growth during the pandemic phase, the demand started declining as people started going out to purchase meat
Nishanth Chandran
CHENNAI: Omni-channel fresh cut meat food retail start-up TenderCuts is on the verge of being acquired by a Gurugram-based entity. The deal is expected to be signed and sealed this week as it is in the final stages of closure, confirmed its founder-CEO Nishanth Chandran to DT Next. Though he did not divulge the name of the brand, a report said Good To Go is the company which is acquiring it.
TenderCuts which offers meat and seafood to customers through its neighbourhood stores, has been going through a rough patch for over six months now.
Though the city-based venture raised $29.1 million over multiple rounds, TenderCuts has had to shutter down its operations in Bengaluru and Hyderabad and confine itself only to Chennai. Cash flow issues and other operational problems have led the entrepreneur to a total exit, while he hands over reins of his third venture to the new owner.
Seeing itself as a tech first company, TenderCuts entered the meat delivery space in 2016 with the assurance of delivering antibiotic-free, hygienic, and farm fresh chicken, free range goat, and seafood in 120 mins at the doorstep. Funded by key investors Paragon Partners and Nabventures, besides others such as Harman Ventures, NS Trading and Investments and Stride Ventures, the going was good for TenderCuts which even secured $9.26 million in a Series A round held on April 2, 2022. But things took a bad turn as apparently, customers ordering through their app, started receiving “out of stock notifications.”
“Even a physical store, near my home, was shuttered on a Sunday, that is quite unusual,” notes one such customer, who spoke to DT Next. TenderCuts had expanded its branch network at a frenetic pace to 100 going beyond Chennai to Bengaluru and Hyderabad. However, wrought with supply chain issues and delay in payments to vendors, the entrepreneur was finding it difficult to do business.
From seeing 3x and 4x growth during the pandemic phase, the demand started declining as people started going out to purchase meat. Even the actual growth rate prior to the pandemic has been difficult to achieve, revealed a source. When DT Next contacted Nishanth to find out more on the brand’s sudden decline, he confirmed “we are in the final stages of closure with a north-based company, which is acquiring the assets.”
He cited the instance of fund raise efforts falling through in a tough market, especially the business he operates in. “Though the market is large and estimated to be Rs 4 lakh crore, growing at a compounded annual growth rate of 8-10 per cent, there are only five to seven main cities in India, where this business is sustainable. We have reached a plateau and since we are not seeing a rapid adoption to the B2C model (as 95 per cent is still wet market), we felt the best option is to go the acquisition route.
In the last three-four weeks, things have progressed on this front and the brand is in the middle of resuming the operations as most of the business is in transition mode,” said the CEO about TenderCuts, that has yielded “moderate outcome.”
TenderCuts was forced to vacate Bengaluru and Hyderabad, where though the consumption of meat is high, it has been impacted by competition following the entry of multiple brands.
“The reliability factor has taken a backseat as the products are no longer available,” said another individual, who wished to remain anonymous, as he explained the rationale of shifting to other brands offering similar service.
Nishanth chose to pivot to ‘Happy Chops’, a marketplace model, meant to empower local meat shops with advanced technologies, robust supply chain, and accelerated growth, in February this year.
“We see more potential with this approach as direct-to-consumer brand growth will stagger given the customer behaviour. In the 6-9 months’ period, we had to make the critical decision.
It made sense to move to an asset light model and exit regions where we are not profitable,” said the entrepreneur. The around Rs 150-crore TenderCuts, which employs 300-odd employees, was on the path to profitability last quarter, he added.
