Why did we invest in Masterchow?

This thesis captures our thought process and the questions that we tried to answer for ourselves, before we issued them a term-sheet.?

Does it taste good?

The brand was introduced to us by one of our LPs, so as a first port of call, we decided to give the products a go. We ordered a batch of noodles and sauces; it was super easy to cook, as promised, only one sauce was needed; no complications in mixing sauces, adding salt, powders etc. The end-result was amazing noodles! We could appreciate this better, cause, when we (my wife & I) were locked up at home and bored of eating Indian food, we bought whatever asian ingredients available in the market and tried making it at home. It was below-average at best and we realised we were better off ordering from the local Chinese restaurant. We then gifted Masterchow sauces to our close friends and family, without an exception, everyone loved it. Some of them loved the 'Black bean jam' so much that even when they ordered from a fine-dining restaurant like Asia Kitchen, they topped up the noodles with this. So we knew, we were on to a 'killer product' here.

Does this category have any tailwinds?

1. Driven by the lockdowns in 2020 & 2021, we now cook a lot more at home. A lot of us rediscovered our love for cooking (& spammed Instagram in the process), while few others learnt to fend for themselves for the first time.
2. More than 60% of all households in India are now either just couples or couples with kids. This enables families to experiment with flavours and cuisines easier at home. In a lot of urban households where both work, cooking becomes a common affair and the 'load is shared' equally. Anything that helps people cook, good food, fast, will be lapped up.
3. Contrary to popular opinion, people don't always order exotic dishes while ordering in from restaurants. According to Swiggy, the top 5 dishes ordered in 2020 were 1) Chicken Biriyani 2) Masala Dosa 3) Paneer Butter Masala 4) Chicken Fried Rice & 5) Mutton Biriyani. So we believe there's a business to be made in helping people cook, restaurant quality, simple food at home.

...but is the market large enough?

The first Chinese restaurant in India was opened in 1920 in Kolkata (Look up Eau Chew Restaurant, it's still open), this was 4 years before even the Bengaluru favourite MTR! Indians love Chinese food a lot; to put it in numbers, as of end-2019, there were ~73k North Indian restaurants on Zomato; a close second was Chinese restaurants at 53k. This was 5x the number of Pizza outlets in the country, which is the third largest category. We obviously cook a lot of Indian food at home and that's evident; the Indian spice-mix leaders in every region clock at least Rs.2000cr in revenue and we have newer players like iD Fresh & Tasty Tales which are pushing the boundaries of Indian RTC category. What, however, surprised was that even though Chinese food is so loved, we have only one homegrown brand that's helping us cook this cuisine at home. This segment has been lagging in innovating and introducing new products. So yes, we believe, the market is incredibly large and there is a huge white space available for the taking.

The X factor

Although they had limited capital, they've already set up their own manufacturing, capable of producing over 7000 bottles/day. They intend to keep manufacturing in-house for the near future, to safeguard the recipes, ensure quality and aid in quick iteration for new products. They also have their own content studio which has enabled them to create some very interesting content (almost everyone you see on their Instagram are employees of the company) and its resonating well with their TG as they have scaled their followers to more than 20k in a year. We love companies which can stay capital efficient and those who strive to achieve more with less (that's a big deal in this funding frenzied environment).

Founder-Market-Fit

Sidhanth & Vidur are no strangers to the Asian cuisine. They've been running a successful Asian QSR chain based of Delhi/Gurgaon called WokMe. They're incredible ambitious and prior to the pandemic, they had plans of scaling up the outlets of WokMe to multiple Tier-1 cities. However, come March'20, driven by the black-swan event, they decided to quickly think out of the box and package their much loved sauces. By June'20 they had procured the requisite licences and the sauces began selling like hot cakes (given that they were still bootstrapped then, this shows incredible resilience).

Another aspect we love about these two is how they excel at performing their functions individually; Vidur is a dreamer at heart, loves ideating new products, marketing ads and also handles manufacturing, Sidhanth on the other hand loves interacting with people and excels at execution, so he leads sales, operation and investor relation functions.

While there are a lot of DTC brands springing up, we've not come across too many brands that we can say with confidence have the right set of ingredients to build a very large business. We believe, Masterchow is one of them & are super glad to partner with them from the get-go!