Restaurant India News: Rebel Foods Shuts Offices, Weighs Exit from Smoor Amid Restructuring

Rebel Foods, the cloud kitchen operator behind brands like Faasos and Behrouz Biryani, is reportedly in talks to sell its majority stake in premium dessert brand Smoor. Sources familiar with the matter indicated that the company has been exploring potential buyers for its approximately 57 percent holding in Smoor, though no deal has materialized yet.

This development comes as Rebel Foods undertakes operational restructuring, including the closure of its offices in Gurugram and Bengaluru. The company stated that it is consolidating its teams in Mumbai to enable faster decision-making and improve internal collaboration.

While responding to queries, a Rebel Foods spokesperson maintained that the company is still supporting Smoor and continues to invest in its long-term growth. “Over the past six months, we have made significant long-term investments in Smoor, including the commissioning of a new state-of-the-art manufacturing facility,” the spokesperson said.

Rebel Foods acquired its majority stake in Smoor in April 2022, valuing the brand at over $50 million. At the time, the acquisition aligned with Rebel’s broader plan to evolve into a brand aggregator in the food and beverage sector, with a commitment to invest up to $150 million in acquiring and scaling multiple brands. However, the company has not disclosed how much of that capital has been deployed so far.

Despite initial growth targets, Smoor’s performance has fallen short in key markets like Mumbai. In FY24, the brand posted a 16 percent increase in revenue, reaching Rs 149 crore, according to data from Tracxn. However, losses widened to Rs 19 crore from Rs 17 crore in FY23 and Rs 10 crore in FY22.

The underperformance has raised concerns internally, especially as Rebel prepares for a potential public listing. One person familiar with the matter said the company is under pressure to streamline operations and focus on high-performing assets before making its market debut.

Rebel Foods closed a Rs 1,750 crore ($210 million) funding round in December, led by Singapore’s Temasek, maintaining its previous valuation. Financial filings with the Registrar of Companies show that Rebel’s net loss narrowed by 42 percent to Rs 378 crore in FY24, while revenue rose 19 percent to Rs 1,420 crore.

Meanwhile, competitor Curefoods, backed by Binny Bansal, has filed draft papers for a Rs 800 crore IPO. Curefoods operates several digital-first food brands such as EatFit, Sharief Bhai Biryani, Nomad Pizza, and Krispy Kreme and is currently the second largest player in India’s internet-first cloud kitchen space after Rebel Foods.

In a recent LinkedIn post, Rebel Foods founder and CEO Jaydeep Barman shared that the company plans to acquire, invest in, or partner with restaurant brands that have reached a "minimum scale," as part of its continued growth strategy.