Fresh food start-up iD Fresh Food raises Rs 507 crore

By Salman SH

Fresh food start-up iD Fresh Food on Tuesday announced the closing of its Rs 507 crore Series D round of funding from Hong Kong-based private equity firm NewQuest Capital Partners, along with the existing investor, Premji Invest. Early investor Helion Venture exited the start-up at 10x multiple, according to a company statement. Kotak Mahindra Capital acted as the exclusive financial advisor to the company and Helion.The strategic fundraise will further strengthen its market leadership in the fresh foods business, foster product innovation, build capacities and expand its presence across key markets in India, the UAE and the US.

As part of its global expansion plans, the company plans to extend its presence to Singapore, Malaysia and other markets in the near future.  Founded by PC Musthafa, Abdul Naser and his brothers in 2005, iD Fresh had secured $5.2 million in Series A funding from Helion Ventures in 2014 and $25 million from Premji Invest in 2017. The Bengaluru-based start-up manufactures and sells its own range of ready-to-make foods like idli/dosa batter, parotas, vada batter, chapati, paneer, among others.

It currently retails to more than 30,000 offline outlets in markets including India, UAE, and the US.Jaipal Singal, chief financial officer, iD Fresh Food told FE in an interaction that the start-up has witnessed unprecedented growth across all its stock-keeping units (SKUs) and is on track to achieve Rs 500 crore in revenue (run-rate) for the current fiscal year, despite the pandemic and related challenges in the last two years.  “We did have some inflationary related pressure on our business last year due to raw material price inflation, but we have still managed to improve our margins efficiently.

Apart from ready-to-make parota and idli/vada batter, the second largest selling SKU are dairy products like paneer and curd, we sell around Rs 2.5 crore worth of curd every month, and another Rs 5 crore of paneer every month,” added Singal.He also mentioned that the start-up plans to launch two new manufacturing facilities in the next few months including in India and Gulf Corporation Council (GCC) countries.“In India, we have an existing plant in Hyderabad, and we are almost running out of capacity. We are actually looking for a larger manufacturing facility in Hyderabad which should be up and running in the next 12 months. We have already started work on a new manufacturing facility in Delhi which should be live in the next 3-4 months.

We are also expanding into GCC countries including Saudi, Bahrain, and Kuwait,” Singal said.Last year, the company launched an idli-dosa factory at Anekal in Karnataka with a capex investment of close to `50 crore. It’s a fully automated kitchen that produces over one lakh kg batter and three lakh parotas per day.“iD is a people’s brand, driven by high ethical standards. Values are vital to our growth. The fund raise is yet another milestone in our journey but the ride has just begun.

In the coming years, we will expand our presence across channels and geographies, strengthen our supply chain practices and introduce innovative products that will redefine the packaged fresh food space not just in India, but across the globe,” PC Musthafa, co-founder and CEO, iD Fresh Food said in a statement.iD Fresh’s sales from e-commerce have grown by 300% reflecting the massive growth opportunity that D2C promises.

To provide consumers with broader access to iD Fresh’s products, iD Fresh has also partnered with BigBasket to launch a co-branded label, iD Fresho. Around 75% of iD Fresh’s sales come from offline channels, and the rest comes from grocery delivery platforms and e-commerce marketplaces, according to Singal.