Alteria Capital Makes First Equity-Cum-Debt Investment Of $4.8 Mn In Raw Pressery

Mumbai-based organic juice startup Raw Pressery has raised $4.8 Mn (INR.33.5 Cr) across equity and venture debt from venture debt firm Alteria Capital.

Founded by Anuj Rakyan in 2013, Raw Pressery offers premium cold-pressed juices and smoothies and is currently available in cities such as Mumbai, Delhi, Bengaluru, Pune, and others. It is also present in Qatar, Abu Dhabi, and Dubai in the Middle East.

Raw Pressery plans to use the funding to scale its new categories — nut milk, soups, and probiotic dairy drinks. It is also looking to expand its distribution in India as well as in international markets such as the Middle East and Southeast Asia.

“When you have a great product, a strong founder and an inefficient yet deep market, you have all the ingredients for a very strong proposition. We are seeing increasing interest in the Indian consumer segment and this investment is aligned with our belief that strong, Indian consumer brands backed by venture capital are going to create massive outcomes in the medium to long-term,” said Vinod Murali, co-founder and managing partner, Alteria Capital.

Murali further said, “This is a relationship that has been built over a long period of time; I have known Anuj for the last few years, I have funded him as well in my previous organisation (InnoVen Capital). So, I have a high level of familiarity and a strong relationship with the founder, and I saw a great product. It’s a growing market from a consumer perspective where there is a higher health orientation, and people are willing to pay for the products.”

He also explained that if you look Alteria’s deals so far, the focus is on consumers; he added that consumer businesses are going to see a lot more velocity in next 12-24 months.

“So, a good product, a great team, a young but growing market, and growing distribution strength make it a very interesting proposition for us,” added Murali.

On the support for Raw Pressery with this funding, Murali said: “A multilayer conversation is going on already, this ranges from support in distribution to access different forms of financing, helping them with their balance sheet management, with transaction banking, capex, etc, so there is a wide range of areas that we have already had discussions on.”

Alteria Capital: A Venture Debt Firm With Interest In Equity

Alteria Capital provides venture debt to high growth, innovative Indian startups with a cheque size range of $286.38K – $14.31 Mn (INR 2 Cr – INR 100 Cr).

Launched in October 2017 by former Innoven Capital executives Ajay Hattangdi and Vinod Murali, the Alteria Capital India Fund I has a total corpus of $123 Mn (INR 800 Cr). It has a green-shoe option of a further $30 Mn (INR 200 Cr).

Till date, the firm has received commitments worth more than $78.75 Mn (INR 550 Cr) from institutional investors and family offices, including IndusInd Bank. This includes the $15 Mn (INR 100 Cr) it raised for its $150 Mn (INR 1,000 Cr) maiden debt fund from the Small Industries Development Bank of India (SIDBI).

The Alteria Capital India Fund I expects to make its final close in H2 2018.

Talking to Inc42 about the first equity funding, Vinod Murali, co-founder and managing partner, Alteria Capital, said that 10% of the investments from the fund will be made in equity of selected companies.

“Alteria will predominantly be a venture debt vehicle only, so our primary focus will continue to remain venture debt. But given that we are an AIF firm, we have the ability to invest in equity as well. The second thing is we have a very good relationship and a good understanding of business here and in this case, it is a very strong equity syndicate as well — you have Sequoia, Saama etc — so there is a lot of comfort in this transaction,” said Murali.

Earlier, in March 2018, ready-to-cook foodtech startup Fingerlix raised $1.31 Mn (INR 8.5 Cr) of venture debt from Alteria Capital. A week later, the firm pumped $4.64 Mn (INR 30 Cr) into Bengaluru-based fashion startup Universal Sportsbiz Pvt Ltd (USPL).

In May 2018, Alteria also invested $2.3 Mn in Toppr, a Mumbai-based personalised elearning solutions provider and online test preparation platform.

Murali reaffirmed that the firm would continue to lead venture debt investments but would do equity as well.

Talking about financing via equity and venture debt, he said, “You want to use equity for product building, engineering, core technology, core platform building, and so on. If you have to invest in expansion or marketing or working capital, then you can use debt for that. So, the ideal mix is both.”

Raw Pressery: Juicing The Indian Health Demand

Raw Pressery’s juices and smoothies form about 90% of its revenues and the startup has introduced new categories such as nut milk and soups. Unlike packed juices that have a shelf life of up to six months, Raw Pressery products have a limited shelf life and need coolers in their supply chain.

The total capital raised by the firm stood at about $27.13 Mn after a recent funding of $9.55 Mn (INR 65 Cr) from its existing investors — Sequoia Capital, Saama Capital, and DSG Consumer Partners.

Prior to this, the startup raised $6 Mn from the trio in October 2017 and over $543K from Bollywood actress Jacqueline Fernandez in April 2017.

Raw Pressery claims to have grown its business to over 120% in FY18 and it aims to grow its revenues by about 112% in FY19.

The company is also working to expand its retail touch points in India from 2K to 6K by the FY19 end. It has targeted a turnover of $14.69 Mn (INR 100 Cr) for the next two years, with an aim to grow over six times since FY17.

Raw Pressery has in-house logistics and manufacturing units that help control costs and quality. 

“We have built a lot of defensive moats including our sourcing back-end, own supply chain, intellectual property (IP) and branding. That has helped us scale significantly and meet about 96% of our revenue projection for FY18,” Rakyan had said earlier.

The filings reveal that Raw Pressery clocked upto $2.21 Mn (INR 15.1 Cr) in operational revenues for FY17, a growth of about 140% from $924.62K (INR 6.3 Cr) in FY16.

Healthy Juices Industry

In India, Raw Pressery competes directly with brands such as Paper Boat, Juicifix, JusDivine, and indirectly with fruit juice and drinks brands such as Frooti, Appy, Maaza, Minute Maid, Slice, Fresh Gold, Del Monte, etc.

Many early stage startups are placing their bets on healthy juices. Bengaluru-based SapFresh provides pure, fresh, cold-pressed, and 100% organic juice shots of wheatgrass, amla (Indian gooseberry), beetroot, and carrot, etc, leveraging the hyperlocal delivery for delivering its products to customers’ doorsteps every morning.

One of the leading fitness, health, and wellness startups in the country — Cure.Fit — serves healthy drinks such as Antioxidant Kick, which includes electrolyte-rich coconut water; Hydration Lift, which includes anti-inflammatory goji berries; Core Cleanse, which has anti-inflammatory fruits and veggies, through its Eat.Fit vertical.

According to ‘Beverages: Indian Scenario’ report, the health beverages market currently stands at $300 Mn and is the fastest growing market among beverages. According to a Technopak report, the Indian packaged juice market is valued at $200 Mn (INR 1,100 Cr) and is projected to grow at a CAGR of 15% over the next three years.

With the demand for healthy products spiralling in an increasingly fitness-focussed India, players such as Raw Pressery have a lot of scope to introduce new products to add to continue their growth trajectory.