In 2014, Rahul Parekh left his job as a derivatives trader at Goldman Sachs in order to launch his own food company.
That company, EatFirst, is now shipping ready made meals to people’s homes and offices across London and is considering expanding to other UK cities from next spring.
The startup, which has delivered over 100,000 meals since launching in September 2015, has an app that allows people to order healthy meals in advance. You can order up to two weeks in advance or effectively on demand.
Parekh, who spent eight years at Goldman, now relies on an army of approximately 10 chefs to conjure up fresh dishes on a daily basis. The food is cooked in a kitchen in Wapping before it’s delivered to people across the capital by a fleet of between 50 and 100 delivery drivers.
“I started the business really as a focus on curing everything that was wrong with takeaway food,” the 30-year-old told Business Insider. “My background was in banking. I spent eight years at Goldman and I ordered a lot of takeaways and I just didn’t feel like it was a great experience and thought there was a big potential gap in the market for a business that was just really focused on creating great delivery food.”
Unlike Deliveroo, UberEats, and Amazon Restaurants, EatFirst cooks all of the food it delivers itself instead of simply shipping food that’s been made by other restaurants.
“We cook everything fresh on the day and then we chill it down and we send it to you,” said Parekh, who holds an economics degree from Cambridge University.
“Our meals come accompanied with meal cards. Those meal cards contain very short, simple heating instructions. You know, five minutes in an oven or microwave or hob. If you compare it to say a supermarket ready meal, the difference is supermarket ready meals are typically packed full of preservatives because they need to last a long period of time. That’s why they can taste good but they’re unhealthy and don’t feel healthy.”
EatFirst’s menu has approximately 10 main dishes on it each day, as well as snacks, wine, and desserts. The rotating menu is dictated by head chef Ben Hodges, who used to work in the kitchens at The Ivy and The Century Club, before joining Japanese food chain Itsu to work on R&D. “He’s been the main driving force behind the menu,” said Parekh.
Parekh says that the most popular EatFirst dish “by far” is the £9.95 salmon teriyaki. “The dish is made in an EatFirst way with a healthy focus so the rice is mixed with quinoa and there are fresh vegetables,” he explains. Other dishes available on EatFirst include Thai beef Panang curry and grilled baby chicken, both priced at £8.95.
In terms of who is using the service, Parekh says there are a large number of business customers who order food for time-poor employees that they can eat during team lunches or team meetings. “They generally tend to be tech companies ordering for meetings. 50-200 people companies,” he said. “That’s quite common. We also have relationships with some corporates, typically financial.”
Fuelled with capital from Berlin’s Rocket Internet
In order to get EatFirst off the ground, Parekh turned to German company builder Rocket Internet which gave it an undisclosed amount of seed funding for an undisclosed stake in the company.
“I met Oliver Samwer, who runs Rocket Internet. It was an introduced meeting through an ex-colleague at Goldman. I told him about the business idea. For me it was kind of a way of pitching to get seed investment. He thought it was a great idea and gave us the seed funding.
“I can’t say how much but it wasn’t a large amount. Basically enough for us to get an initial MVP [minimum viable product] operation going. Build a small team, have a kitchen, and start doing some trials around food production.”
Rocket invested in EatFirst again last year alongside the Daily Mail and General Trust (DMGT) when the company raised an $8 million (£6 million) funding round.
“The way it worked with Rocket, was we went through effectively a 100-day incubation programme with them,” said Parekh. “We did it a little bit different to some of their other ventures which are more home grown within Rocket. They helped us with resources for example. They gave us access to their IT talent, marketing talent, finance talent. We were able to draw upon those resources to get started and then slowly we started building our own team before we came off that incubator.”
Samwer, one of a handful of tech billionaires in Germany, has been called out as a ruthless CEO who can be difficult to work for. His company employs aggressive growth tactics in order to take businesses from idea to billions of dollars in revenue in under three years. But Parekh only had kind words to say about Samwer, who IPO’d Rocket Internet on the Frankfurt Stock Exchange in 2014.
“Oliver is very, very hands on in terms of [EatFirst] strategy discussions. So I get phone calls from Oliver at least every week or every two weeks. At least. He’ll give me a call and say: ‘How are things going?’ We’ll talk about the strategy.
“What’s great about Oliver is because he travels all over the world and sees so many different companies, he knows what’s going on in terms of food tech innovation in Asia and Africa, much more than I do. I follow Europe quite closely. I follow the US quite closely. But he’s seeing everything.”
Samwer has also been very good at making introductions to other food startups in the Rocket portfolio, including FoodPanda, Delivery Hero, and HelloFresh, according to Parekh. HelloFresh’s former head chef ended up helping Parekh to find suppliers in London and he’s even had some input on the company’s recipes. But Samwer doesn’t overstep the mark.
“The business strategy is dictated by management of EatFirst,” said Parekh. “And then we have a quarterly board meeting which involves all our investors. Rocket, Holtzbrinck Ventures. We discuss any major changes in those meetings. None of our investors have been particularly hands on in terms of the organisational operation.”
It’s expensive to play in the food delivery market
But $8 million (£6 million) isn’t all that much to play with in the increasingly competitive food delivery market. Uber and Amazon, although in a slightly different space, have billions of dollars to throw at this as they look to replicate their plug and play operation in cities across the world.
Parekh said that if EatFirst decides to expand outside London then it will likely look to raise more funding.
“London is the focus for the next three to six months,” said Parekh. “Then our plan is to start thinking about outside of London by end of Q1 next year or beginning of Q2. At that point we’ll start thinking about raising another round.
“Our thinking is this is a UK business, it’s working really well in London and I’m personally very keen to expand it to other cities in the UK. Birmingham, Manchester, Brighton. I’m from Manchester. I think it could work really well there.
He added: “There’s obviously big cities in Europe and outside of Europe that we’re quite keen to have an EatFirst presence in at some point in the future. We’re thinking about cities in Germany like Berlin, Frankfurt. Outside Germany: Paris and Amsterdam.
In terms of whether Rocket will continue to get behind the company, Parekh said: “Well Rocket is a big believer in the business and typically when they do believe in businesses they do invest almost every round the business raises so I would hope so.”