Since a venture capitalist has seen ups and downs of businesses at close quarters, he should not limit his role to that of funding ventures only. He can definitely start his own venture easily, considering the business-related experience he has gained ove
Since a venture capitalist has seen ups and downs of businesses at close quarters, he should not limit his role to that of funding ventures only. He can definitely start his own venture easily, considering the business-related experience he has gained over the years. Proving this point, Kiran Nanadkarni, a pioneer in venture capital funding in India, moved on these tracks and established Kaati Zone. In conversation with TFW, Kiran discusses his early venture days, entrepreneurial journey and future plans.
What led to your interest in the food and beverages industry?
As a venture capital professional, I am always looking out for opportunities in the marketplace (e.g., demands of customers which are not being addressed effectively). During my days at JumpStartUp, I felt there was an interesting opportunity in creating a quick service restaurant (QSR) brand in India. I had spent 20 years in the venture capital industry and felt the need to rediscover myself. I therefore, decided to pursue this opportunity in which I had a strong conviction.
Which are the various formats and product offerings of Kaati Zone?
We have four formats – Dine-in, Delta, Express and Mobile. The Dine-in restaurant is a flagship format located on high streets and in prominent localities. This format carries the complete range of our products. The Delta (delivery and takeaway) format is a smaller-sized restaurant located in residential areas and carries only the products that can be delivered. Express format is located in food courts of malls, tech parks, campuses, airports etc., and carries a limited range of products. The mobile format is for outdoor services during events at schools, colleges, corporate offices and large apartment complexes, and also during events involving popular sports and cultural shows.
Our main offering is a kaati roll. We offer multiple options to customers involving selection of paratha, fillings and extras (egg/cheese) that help them make a meal of their choice. We also offer snacks, beverages and desserts.
After following a company owned model, why do you plan to move towards franchising?
Any retail brand has to go through a gestation period during which it gets the concept, products, retail formats and business model in place. It then reaches an inflection point from where it can achieve quantum growth. Kaati Zone is now at this inflection point and we believe we can achieve the full potential of the brand through franchise partners.
What are the expansion plans of your company and which are your target cities?
We are looking at entering five cities in the next 18-24 months to reach about 100 outlets of different formats. Our target cities are: Mumbai, Pune, Chennai, Hyderabad and Bengaluru, where we are already present.
How did you fund your venture?
Erasmic Ventures, which is now part of the prestigious US-based venture capital firm Accel Partners, has invested in us. We also intend to raise Rs 15 crore, and are already in dialogue with select venture capital firms. We intend to close this round of funding by Dec 09.
The Small Business Administration (SBA) in the US contributed significantly to the growth of venture capital industry there. Why can’t we have something on similar lines in India?
I entirely agree, there is a need for an SBA equivalent mechanism in India. SBA provided capital support to private venture capital initiatives in the USA and helped establish the success of this industry. Risk capital for start-up businesses is extremely limited in India. Most venture capital firms prefer to support proven businesses. The SBA-equivalent effort can catalyse the creation of a strong private venture capital industry that can invest in new business ideas.