Yumist Case Study - Startup that didn't make it Big

Q: How did Yumist fail?

In 2017, the main reason for the start-up being closed was a lack of funding. Hence, operational charges increased and profits did not increase.

🔍Insights

Ashutosh Roy Choudhury

May 7, 2021 — 6 min read

We all have come across instances of startups making it big, in fact every business is a startup in the initial stages. There is a lot that goes into turning those intangible dreams into a tangible reality. The right investment, continuous performance, meeting short-term and long-term targets, all are equally important to a promising idea. This is where a startup makes it or breaks it. One such startup that we are going to discuss about is Yumist, a startup that aimed to serve home cooked meals via Zomato and Swiggy.

Startups are brainchildren of visionaries which go on to create history most times. Though, nowadays we even have Startup Accelerators to boost startups, but still there are some exceptions to this statement. Let's get a glance on Yumist Case Study - The Story of Yumist.

What is Yumist?
How did Yumist pan out as a startup?
People's verdict on Yumist
What led to Yumist's failure?
Learnings from the Yumist Case Study
Yumist - FAQs

What is Yumist?

Founded by Alok Jain and Abhimanyu Maheshwari in 2014, Yumist sought to establish a network of homemade food for people who wished to experience the same. The Gurugram based startup aimed to serve home cooked meals via Zomato and Swiggy at rates starting from INR 100.

The Brains behind Yumist — Alok Jain and Abhimanyu Maheshwari - Yumist Founders

The foodtech startup aimed to make it big in the foodtech industry, combining the goodness of home made food with the ease of having it delivered to one's doorstep. Their vision of steady expansion and serving the working sector seemed pretty achievable initially but ended up choking them to the very core.

How did Yumist pan out as a startup?

As Promising as it sounds, there are certain practicalities which are involved in every theoretically perfect plan. In this case, funds eventually turned to be the determining factor.

The idea drew a handsome number of investors and was more or less a hit amongst them. The next step was to implement the right techniques to take the idea forward. Yumist did well to partner with Zomato and Swiggy for delivering pocket friendly homely meals. They had even carved a niche for themselves in certain regions but that was far from a permanent spot in the market. It would've taken them more than just consistency to achieve that.

People's verdict on Yumist

The reviews for Yumist were no different from the ones any foodtech startup would receive: a mixture of good and bad reviews. Though all reviews have either been removed or deleted, there are certain reviews one can still come across. These reviews happen to be from regions where Yumist wasn't even active, in fact it never served those regions deeming them null and void.

The important factor behind Yumist's downfall was poor timing and an eventual cash crunch. The foodtech startup misjudged certain aspects and couldn't fortify its position in the industry eventually leading to the shut down of the company.

What led to Yumist's failure?

Yumist's expansion wasn't as widespread as the company would've hoped for and the startup was active in just a few regions.

In May 2016, operations in Bengaluru were shut down due to the absence of a kitchen in the city. This was followed by the inauguration of a 12000sq ft. kitchen for Delhi NCR. Yumist was still recovering from the losses incurred due to the shut down of operations in Bengaluru.

This came as a major setback for Yumist's profits. The major reason they gave for this shut down was the absence of a dedicated facility for food preparation. Since the operational charges were racking up and the profits weren't, the company had to close all operations in 2017.

The major reason for the startup being shut down in 2017 was lack of funds. Investors who had entrusted the startup with its promising vision could see it lacking steam. The startup had generated funds but not enough to sustain its operations.

“We failed to raise the kind of capital that this business required while staying true to the customer problem. In hindsight, there’s a bunch of internal and external factors that led us to this dead end,” stated in a post on Yumist's blog.

The founders were positive that the condition of the startup would eventually improve and by June 2018, they would've become a profitable company. The fact that they were incurring more losses, not even enough to sustain operations made this belief look more unrealistic with each passing day.

The final blow came in 2017 when Yumist had to finally close all operations and give up on the vision they had started off with.

“We are shutting shop today. We failed to raise the kind of capital that this business required while staying true to the customer problem. In hindsight, there’s a bunch of internal and external factors that led us to this dead end. We learnt from our mistakes and recovered fast, but maybe not too fast,” asserted the founders on the company's blog.

Learnings from the Yumist Case Study

As Yumist couldn't become autonomous and depended on investors for most of its time, it eventually crumbled under its own weight. There were some debatable decisions as well that somewhat catalyzed its downfall. The founders Abhimanyu Maheshwari continued with his company Zing Restaurants while Alok Jain got associated with Swiggy as EiR post the failure of Yumist.

Though there ain't much one can do to avoid certain situations we can obviously learn to consider certain aspects while kickstarting a startup. The basic learnings from Yumist Case Study can be - considering the target sector, funding and budget before taking decisions for a company. If Yumist was to have a more insightful approach to these, the outcomes would have varied to what they eventually were.