Growing at a CAGR of 18-20 per cent food business has become one of the most lucrative segments to invest into. Not only investors but, also individual corporate are putting heavy amount into the segment witnessing great returns the industry is offering.
Last year that could be termed as the investment year for food business especially Food-Tech business inviting more than $250mn investment alone, this year seem less active in terms of attracting the investors. May be, it is the fear that many food-tech players have put in at their face because of their sudden closing and failure into the business. But, there are few start-ups and restaurants that grabbed the opportunity and invited investors to put money in them showing great scale for the business.
The Food-tech race
Starting May, Mobikwi, a Gurgaon based mobile wallet and payment platform which caters to restaurants like Domino’s Pizza Hut amongst others raised Rs 50,000,000 from GMO Payment Gateway and Media Tek. Similarly, Vadodara based BoiBanit, a Consumer Internet platform has raised seed funding from undisclosed list of investors.
And, this doesn’t ends here Swiggy, one of the fast evolving and growing online delivery platform which has attracted investors previously has also raised Rs 7,000,000 from its existing investors including, Norwest Venture Partners, DST Global, Accel Partners amongst others. Going forward, Bengaluru based food ordering mobile app TheSmartQ has attracted Rs 250,000 funding from YourNest Angel Fund.
Entering the long haul race, Gurgaon based Eatonomist has raised an undisclosed amount in seed investment from MCube Capital Advisors Pvt Ltd. Operated by Fitmeal Solutions Pvt. Ltd, Eatonomist will use the capital for marketing and building brand. “We have recently revamped our website and with the funding, will soon launch an app as well,” said Anisha Dhar, co-founder, Eatonomist.
QSR always offer lucrative returns
And as people have always loved the fast food space, entering this space with small investment and relying on big returns has become the nature of the segment. Mamagoto one of the top trending restaurant in Asian food today, has bagged Rs 335mn from Max Ventures & Industries which has made its first maiden venture into the PE segment. MVIL will be co-investing in the second round with Goldman Sachs, the key investor in the first round.
Explaining the rationale behind the investment, Sahil Vachani, MD, MVIL, said, “Within the sectors that we are actively considering for investment, we particularly favored Azure Hospitality because of the vision of its founders, their values , the scale they have demonstrated and the potential for profitable growth. We are also pleased to partner the existing investor, Goldman Sachs, who is investing further at this stage. The strong fundamentals of Azure coupled with huge growth prospects within the sector make this an exciting opportunity for MVIL.”
Similarly, Gurgaon based start-up which is serving fast foods has got seed funding from angel investor Ashish Gupta.
Food processing is not behind
Seeing all the lucrative opportunity that the segment is offering, top FMCG players in the country have raised the bar by inviting global investments in them. From Cremica Food Industries which has made a mark in the industry to Maiyas Beverages and Foods owned by MTR founders have got good investments from top investors. Peepul Capital has invested Rs 200 crore in Maiyas Beverages to expand their RTE products
“However, Peepul Capital will invest into the expansion and growth of the brand whereas its existing investor Ascent Capital will support Miayas to build varied product portfolio catering to the urban customers,” shared Sudarshan Maiya, Executive Director, Maiyas Beverages & Food.
In the same manner, Cremica Food Industries, one of the leading FMCG conglomerate has raised USD 15 million from Rabo Equity Advisors, Investment Advisors for India Agri Business Fund II (the “Fund”. With this funding, Rabo has also acquired a minority stake in Cremica.
“Cremica is excited to have Rabo Equity on board as an investor. Rabo’s deep sector knowledge and experience in the food space will help Cremica in a long way towards fulfilling its growth plans,” shared Akshay Bector, Chairman & Managing Director, Cremica Food Industries Limited.
Hence, at a time when India’s food industry is estimated at USD 100 Bn. within this, the organised sector is expected to grow at 16 per cent CAGR to USD 28Bn, in the next 5 years, investing in top brands could be a good opportunity for both investors and brands to grow.