Dil Foods Partners with FreshMenu to Restart Select Cloud Kitchens

Dil Foods has entered into a brand licensing and operator agreement with FreshMenu, allowing the company to restart operations at select FreshMenu cloud kitchens while discussions around a potential acquisition continue.

The agreement comes after reports suggested Dil Foods was evaluating the acquisition of FreshMenu following the latter's suspension of operations earlier this year due to financial challenges.

Clarifying the development, Arpita Aditi, Founder of Dil Foods, said the companies have currently signed a licensing arrangement under which Dil Foods will operate select FreshMenu kitchens using the FreshMenu brand. She added that discussions regarding a broader strategic transaction are ongoing, but a full acquisition has not been finalised and details remain confidential.

Founded in 2014 by Rashmi Daga, FreshMenu was among India's early cloud kitchen brands, operating delivery-only kitchens across Bengaluru, Mumbai, Delhi-NCR and Kolkata. The company built its business around freshly prepared meals delivered through major food delivery platforms.

FreshMenu suspended operations across the country in April following financial constraints after reportedly facing cash flow issues and delayed payments to vendors and employees.

Under the current agreement, Dil Foods will use its operational platform, supply chain, technology infrastructure and restaurant partner network to restart selected FreshMenu kitchens. The company also clarified that FreshMenu's existing financial liabilities remain governed by previous legal agreements and are not part of the licensing arrangement.

At its peak, FreshMenu served more than 500,000 monthly users and raised around US$22 million from investors including Lightspeed Venture Partners, Zodius Capital and InnoVen Capital. However, increasing competition, changing consumer demand and financial pressures impacted the company's business in recent years.

The partnership reflects the growing trend of operational collaborations and consolidation within India's cloud kitchen sector, as operators look to optimise infrastructure, strengthen brand portfolios and improve operational efficiency.