Year Two goes to The Funnel

The cult is seemingly everywhere in Bengaluru these days. Nagori says his objective is to have five gyms within an area where the maximum drive time between two points is less than 20 minutes. That’s because he wants most customers to be able to walk to their gyms.

An excellent strategy defining the goals

This saturation coverage strategy is a good idea but will require a Herculean effort to pull off. From 70 gyms in late August (44 in Bengaluru, 18 in Delhi-NCR, five in Hyderabad, and three in Bombay), Cult wants to get to 125 centers by March 2019, and 200 by December. In comparison, Talwalkars has 251 gyms today.

That means opening two new gyms every week. For the next 16 months.

Will Cult’s hyperlocal-saturation hypothesis succeed in cities other than Bangalore? It’s too early to say.

“While they are growing very fast, no one knows how long these clubs will last,” said Dhillon of Talwalkars. “Whether they will last one year, five years, or 50 years, it will take time before you understand whether the market has responded favorably. Yes, they tend to be a hit in Bangalore, but Bangalore is a small portion of India or the rest of the world.”

In 2017, launched its food business, which today comprises seven kitchens in Bengaluru and one in Delhi-NCR. These kitchens prepare everyday food within strict calorific bounds that people can subscribe to or buy individually. Bansal and Nagori’s target market, they say, is 12 million people who eat at least one meal outside daily. They would like to supply 20 out of the 120 meals that that person eats in a month—roughly 16% of his wallet share, Nagori said.

How can the meals be ordered? meals can be ordered through the app or on Zomato. It can also be bought at corporate cafeterias at places like Flipkart and Goldman Sachs in Bengaluru. By October, the company also plans to launch quick-service restaurants (QSR), expanding to five in December, and open 18 new kitchens across four cities by year-end. From all these avenues, they hope to serve 25,000 meals a day by December.

Presently, that number is about 10,500 meals a day, and often at discounted prices. Bansal and Nagori claim that even with discounts, the operation is “gross profit neutral”, a tech startup construct that can mean many things.

For comparison, India’s food delivery leader and the current unicorn poster-child of large investments, Swiggy serves a similar number of meals daily through its in-house brands, Homely and Bowl Company.

“Keeping health aside for a second, we’ve seen what happened with Jubilant [Foodworks Ltd., the master franchisee of Domino’s Pizza] for example, in terms of the valuations they’re getting, some new food brands are starting to emerge,” Bansal said. “We see as a standalone, building a food brand is potentially a massive opportunity.”

Are people loving it?

The grand target is 1 million meals a day. This would simultaneously give them revenue (and hopefully profits) while acting as the biggest customer acquisition “funnel” to drive people into the ecosystem, who can then be cross-sold other offerings because, well, everyone eats.

Here are the numbers on the cross-selling: About 40% of Cult customers right now have tried, Nagori claims. And 10 to 15% of daily demand is from Cult customers, said Neeraj Aggarwal, head of

The founders could not say how many people who use only purchase other offerings. A few months ago, about 10 to 15% of customers were interacting with other offerings on the app, Aggarwal said.

Half of customers, overall, have tried more than one service, Bansal claims.

Once ingested through the food funnel, customers can be pitched fitness or healthcare. In April, Bansal and Nagori launched, a chain of healthcare clinics (although it has only one right now) they consider integral to the vision. It would add the “medical” glue that connects health conditions, workouts, diet, and meditation.


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