Indonesian cloud kitchen startup Legit Group bags $3m in Seed funding

Legit Group, a cloud kitchen startup backed by Ismaya Group, announced raising $3 million in a seed funding round led by early-stage venture capital East Ventures, with participation from AC Ventures.

Launched in February 2021, Legit Group said it now seeks to be the leader in creating delivery-first food and beverage brands in Southeast Asia after raising the seed funding.

Since its inception, the startup said its sales has grown 9.5X while revenue soared 61% from June to July alone. Legit Group currently has three brands – Pastaria, Sei’Tan, and Juju Chikin – and operates from 45 distribution points.

The company said it plans to launch more brands and expand to 135 distribution points by the end of the year.

The Covid-19 pandemic has severely disrupted the F&B industry globally as people prefer to stay in rather than going out for meals and this condition has created immense opportunities for delivery-focused F&B business, Legit Group said.

Currently, Indonesia has the largest food delivery service market in Southeast Asia at a market size of $3.7 billion, accounting for 31% of the total food delivery value in the region and continues to grow at 35.2% annually.

“This pandemic has further accelerated the adoption of food delivery business and we believe this trend will stay even when the pandemic ends. The DNA of operating delivery-first F&B business is completely different from the traditional offline restaurant business, which is why many offline restaurants have struggled to compete in the delivery market,” said Legit Group CEO and co-founder Sumarno Ngadiman.

The key to success for delivery-first F&B business is to be able to create time-conscious, consistent, high-quality food that stays optimal during the delivery process, and price it affordably so that customers can make it as part of their daily habits, Ngadiman.

Commenting on the investment, Roderick Purwana, managing partner of East Ventures, said Legit Group has proved its capabilities to create unique and exciting F&B brands with impressive growth.

“The team background and focus on creating high-quality scalable brands, amidst a large and rapidly growing market will be a strong catalyst to catapult Legit Group to be the winner in the space,” Purwana added.