Dessert at the doorstep: YogurtBay moves to an app-based model with fresh funding

The family office of the diversified Pittie Group in India has acquired a majority stake in frozen food startup YogurtBay. It had earlier invested an undisclosed amount in seed funding, and has now given a topping of US$240,000.

The freshly funded startup now plans to move into a tech-enabled food delivery model similar to that of Faaso’s, a chain of Indian fast food restaurants which gets 70 percent of its orders from its app. YogurtBay, whose home delivery constitutes only one-fifth of the business currently, wants to expand rapidly with app-based deliveries. It is also opening eight new stores, more than doubling the seven YogurtBay outlets in Mumbai, Delhi, Bhopal, Cochin, Pune, and Hyderabad.

“We will invest in research and development to pump up operational capabilities that help service home deliveries and increase our orders per store by at least 2X,” Robin Chatterjee, founder of YogurtBay.

Chatterjee, a Marketing and Consumer Psychology graduate from Monash University in Melbourne, started up YogurtBay in 2011. “When I came back from Australia, there weren’t too many brands offering fresh yogurt. I realised that the business does not require any high-funda industry knowledge and so I launched my first store in Bandra [an upmarket suburb in Mumbai].”

Among his patrons was the Pittie family, and from eating yogurt they moved quickly to investing in it. “Aditya Pittie [CEO of Pittie Group and now a director in YogurtBay] showed interest in scaling up the business and jumped in as an angel investor,” says Chatterjee.

The Pittie Group has interests in real estate, media and entertainment, retail distribution and ecommerce, which comes handy to Chatterjee while expanding. The new round of funding will also help expand a newly launched segment called WaffleBay. “We will now launch waffle units in cinema halls,” says Chatterjee.

YogurtBay has relied mostly on social media marketing. An “Every belly is invited” campaign on Twitter was the sweetest. “Our customers could tweet #gymbelly, #bollywoodbelly etc along with pictures. It helped us spread the word quickly in new cities with no investment,” says Chatterjee, who claims to be serving 250 orders a day from each store, with an average ticket size of INR 200 (US$3). The company competes with Cocoberry which has over 25 stores in India.

But why pick yogurt over other desserts? Chatterjee makes a strong case for it: “Frozen yogurt is rich in protein, minerals and vitamins. It helps in fat loss, reduces blood pressure, strengthens bones, and can also be consumed by lactose intolerant people. While ice cream contains 15 percent milk fat, frozen yogurt contains less than 1 percent milk fat. And hence fewer calories too.”

An Assocham report estimates that the organised yogurt industry in India could touch US$200 million by 2015 as a low-fat alternative to ice cream.