How this CS & Investment banker sold his house to bootstrap a profitable cloud kitchen business

 

  • Hi, I am Sougata Sengupta, a Company Secretary and a Start-Up Advisor by profession, and a Food Entrepreneur by passion.
  • Defined by destiny, I chose to be a CS instead of a CA.
  • In 2014, after more than a decade in senior roles, I had an epiphany that I was destined to be an entrepreneur. Like any other “khaddo roshik” (food-loving) bong, I decided to start my venture, FeastatEast.com - Bengali cloud kitchen in Mumbai.
  • Even though over the years as an Investment Banker I have raised capital of over USD 3 billion across industries.
  • Today we are a team of almost 150, with 11 outlets and 1 dine-in restaurant catering to over 10,000 food lovers monthly across Mumbai, Navi Mumbai, and Thane, and over the last 7 years, we have satiated the taste buds of over 10 million customers.

Choosing Destiny as My Guiding Force

I grew up in the Eastern Region of India, but my childhood was spent travelling across different cities and towns as my father was an Air Force Officer.

My upbringing has helped me in having a holistic development and has stood me in good stead to adapt across various cultures and environments.

Since my school days, I have always been intrigued about the avenues that a professional degree opens up for oneself. It was destiny that led me to become a Company Secretary (CS).

I was contemplating between becoming a Chartered Accountant and a Company Secretary. My better half, who is incidentally my childhood friend, had already started her journey as a Chartered Accountant. To have diversity in the household, I decided to become a CS

After becoming a CS, I pursued an MBA in Finance to sharpen my corporate and strategic skills.

My Fascination Led Me to Explore the World of Investment Banking

I started my career with Adhunik Group of Industries as their Company Secretary and Legal Head, based out of Kolkata, and spearheaded their growth from an INR 36 crores group entity to an INR 5000 crores group entity within a span of 5 years.

My ambition to excel further led me to join the Aditya Birla Group as one of the youngest Deputy General Managers at the age of 28 years.

After a point of time, I felt saturated in the eastern region and decided to advance my career in Mumbai as an Investment Banker.

As an Investment Banker, I have led the investment banking division of 3 companies and raised capital of over USD 3 billion across industries.

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Peak of my corporate career took an entrepreneurial leap

"You can take a person out of Bengal, but you can’t take away the “bangaliana” out of a bong!"

In 2014, I realized it was time for me to become my own boss and do something which I enjoy.

I have always been passionate about cooking and came up with the idea of converting my passion into a business venture. This led me to start my food venture on 9th January 2014.

In the initial 6 months of my venture, I juggled between leading an Investment Banking Team at Destimoney Securities Limited (promoted by New Silk Route) and being an entrepreneur.

The initial days were tough as I had to self-fund the setup expenses and the losses for the gestation period. I never doubted the business strategy because of my various professional engagements in setting up new businesses across sectors.

With the rapid growth of 8 stores in 6 months, I decided to leave the high-paying job as an Investment Banker behind and dived headlong to sell Kolkata Kathi rolls and biryanis in the city of Mumbai full-time.

At this point, Feast@East started feeling more of a reality than a dream.

Tackling with Unexpected Setbacks

Though the business grew from Day 1 itself, it was almost 3 years before I could reap the financial benefits from the business.

My initial days were full of struggles and challenges. I even had to sell my apartment in Kolkata to fund my dream. But, never did I doubt myself or my capabilities of establishing this business.

Even during these tough times, I stuck to my principle of not utilizing any external funding to grow my business. The reason being I did not want to be answerable to my investors or lenders on what, why, and how I was doing things.

The business was completely bootstrapped and I invested all my life savings including money generated from the sale of my own apartment and my wife’s provident fund.

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Diving into Business with Bare Hands, Literally!

The initial business model was a hub and spoke model with a centralized base kitchen and multiple quick-service outlets (QSR).

Given the bootstrapped nature of my business, I could not afford separate individuals for procurement, accounts, and inventory. So, I was hands-on involved with everything ranging from procurement, product development, taste and quality of the end product, PR activities, accounts, etc.

Every morning at 4 AM my day started with procuring fresh raw materials and continued till 11 PM once the outlets were shut and the accounts were tallied.

We grew to 11 outlets in a short period of time and a team of 138 people of only cooks and helpers. 

Setting Up Cloud Kitchens: The Turning Point of Feast@East

Throughout the business, I learnt and understood that the next step in the journey would be growth through corporate and event caterings as this leads to sweating of the existing infrastructure, less dependence on the high rental costs, lesser wastage of food thus, generating higher ROIs.

This decision was the turning point of my business and was finally giving profits.

Over the last 3 years, there has been a consistent profit in the business, enabling me to hire talent to manage the business, thus freeing me to pursue other avenues.

For 2020, I have started consulting various organizations on establishing new business ventures.

Currently, we have 4 cloud kitchens delivering across Mumbai and my business clientele includes the following:

  1. TATA Group
  2. Reliance
  3. Vodafone
  4. Khaitan & Co
  5. Amarchand Mangaldas
  6. KPMG
  7. PwC
  8. Deloitte

On average, we cater to over 10,000 food lovers monthly across Mumbai, Navi Mumbai, and Thane. Over the last 7 years, we have satiated the taste buds of over 10 million customers.

On an individual clientele, we are proud to have names like India Chairman of PwC, ED of ICICI Bank, Chairman of State Bank of India, and several other eminent personalities from the Industry.

Timeline of my entrepreneurial journey: 2016-2020

2014: Started business in January and reached to 8 outlets

2015: Struggled hard to sustain the business and to fund the losses of the gestation period

2016: Reached 11 QSR outlets and a 30 pack dine-in restaurant

2017: Ventured into catering to bulk orders and started corporate catering

2018: Focused more on the catering space and cloud kitchen model

2019: Best year for the business, we catered to 1500 people in a single day in 3 different locations simultaneously, becoming one of the preferred Bengali Food caterers in Mumbai catering to Shoots, Events, and Corporates.

2020: A moderate year due to the pandemic situation, but with proper planning and perseverance, we strode through the year with positive cash flow. We can proudly say we haven’t retrenched a single employee, rather we have done better than what we expected and have made increment to employees and paid them bonuses as usual.

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The Future: Taking It One Day at A Time

I take business as it comes.

I am never in a hurry to reach somewhere neither am I in a hurry to raise any capital for this business in the future.

There are some business ideas in my mind which I am currently processing. We have been working with self-help groups to procure authentic and ethnic food products from the root places.

The retail food business will continue to gain more customers and perhaps, we will open a few more cloud kitchens in the coming years.

Choosing To Be A “Happy Mess” Over Following The Bourgeois Lifestyle

Many people in their 30s and 40s seek entrepreneurship as a destination, thinking that once they become an entrepreneur they will be termed as “arrived.”

But, the reality is that the initial journey is quite challenging and at times takes everything out of your own self. The “Mantra” is to do what you love and forget about what is trending in the market.

From my own humble experience, I will suggest budding entrepreneurs to take a kitty for their family’s and child's future before taking the risk of doing a business and remember never to touch that kitty.

Knowing where to stop is the greatest art and don’t go overboard thinking that with a turn of a single event things will change. It takes any business at least 5 years to start paying back the business owner.

I always wanted to do something different and I am still enjoying the process and this is the most satisfying part of my entrepreneurial journey so far.

Lastly, do what makes you happy and choose to be humble at every step of your success. Humility will not only win you people and help establish life-long connections but is also an integral part of a thriving successful business.

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