A start-up, EmployeeStreet.com, incubated at the Indian School of Business (ISB) under the Entrepreneurship Development Initiative (EDI) pogramme, is planning to expand its operations across five cities over the next three years.
EmployeeStreet.com started its operation in May 2011 as a website providing discounts to corporate employees on local restaurants in Hyderabad. It allows users to buy the coupons in advance and use them at the restaurants whenever they plan to eat out with in a month's duration.
"The 'eating-out' trend among Indians have seen a spurt over the years with the mushrooming restaurants and food joints across the country. Fine dining is not just about the food, it is about the ambience and quality of the wait staff. So, we see a huge market opportunity in this segment in the coming years," Simrandeep S Parmar, founder of EmployeeStreet.com, told Business Standard.
Betting big on the growing 'eating out' trend among Indians, the start-up has plans to foray into Delhi, Mumbai, Chennai, Bangalore and Kolkata markets.
Within first nine months into operation, the venture has reached out to 1,000 employees across six IT companies in Hyderabad by partnering through various employee benefit programmes.
"Initially, the corporate employees were allowed avail the coupons and later we allowed non-corporate users to avail the coupons. Now, we have crossed more than 10,000 customers within just 16 months of our operation," he said.
"Initially, it was a challenge to get customers. But now, we have positioned ourselves as a quality and need-based player and the response is encouraging. Catering to more than 95 restaurants in the city, we expect a 7-10 fold growth in our customer base within a years' time," he said.
"It costs around Rs 15-25 lakh to start operation in a new city depending on the size of the operation. The biggest cost is usually the customer acquisition cost and there is no end to how much you can spend on on-line platforms to acquire traffic," he said.
“We run our business in a sustainable way by keeping our costs low and not spending on promotion. We have a good set of metrics backing our model and we want to reach out to interested investors. The funds will be used to increase our pace of our growth and prove our business model at a larger scale,” Parmar said.
The venture, which started with Rs 10-lakh initial funding, is now in talks with investors to raise Rs 25 lakh by next month. "Nothing has been finalised yet. Along with, we have also plans to raise around Rs 3-5 crore over the next three years," he said.