SUMMARY
Sequoia Capital, Sofina Capital and Neoplux participated in the round
The funding is said to be a part of a larger $30 Mn round
The lockdown has dried up revenue generated from alcohol sales
Delhi-based craft beer maker B9 Beverages, the parent company of Bira 91, has raised $20 Mn bridge funding in Pre-Series C round led by existing investors Sequoia Capital India and Belgium’s Sofina Capital.
Bridge funding also is known as bridge financing, is intermediate funding intended to cover a business’s short-term expenses until long-term funding is secured.
The bridge funding is part of a larger $30 Mn Pre-Series C equity financing round, which the company plans to use to increase its market share in the premium beer segment. Korean private equity fund Neoplux and multiple undisclosed family offices will be participating in the round.
Founded in 2015 by Ankur Jain, B9 Beverages manufacturers of craft beer brand Bira 91. It is available in multiple flavors and has a presence across Delhi-NCR, Mumbai, Goa, Kolkata, Bengaluru, Pune, and Chandigarh.
The company now operates two breweries in Andhra Pradesh and Karnataka and has offices in nine cities including New York. Last year, it also entered the mass production segment with its product Boom.
B9’s CEO and founder, Jain, added that the company continues to grow its business in both existing and new markets. He elaborated that B9’s market shares in several markets are higher than 5% of overall beer sales. In the premium beer category, the company enjoys a more than 20% market share.
“2020 is a key inflection point for the company where we expect to reach double-digit market share in a number of states through the year,” Jain added.
Jain told Inc42, “The lockdown is expected to be lifted over the next few weeks and is effective for all players including our competitors. In a scenario where we see continued momentum from consumers in favor of our brand as well as new supply capacity in key states like Andhra and Karnataka, we are at a strategically advantageous position compared to last year.”
Besides B91 Beverages, other major breweries in India are Carlsberg, SABMiller India, Som Distilleries and Breweries ltd and Anheuser-Busch Inbev. The largest brewery in India by market share is the Bengaluru-based United Breweries.
Lockdown Halts Alcohol Industry’s Growth
With changes in demography, improvement of standards of living, and higher disposable income, the annual consumption of alcoholic beverages in India has seen a rise. Budget estimates for the financial year 2020, ending March, had expected the total excise revenue generated by alcoholic-beverages industry to be approximately INR 1.4 Lakh Cr, a 15% hike from the previous year.
As per a Statista report, alcoholic beverage consumption in India was estimated to grow from 5.4 Bn liters in 2016 to 6.5 Bn liters by 2020. However, with the current lockdown, all of this has come to a halt.
The sale of alcohol is prohibited and the number of scams related to online sales of alcohol have been increasing. Recently, an industry body the Confederation of Indian Alcoholic Beverage Companies (CIABC) also reached out to the government seeking approval for the delivery of alcoholic beverages.
CIABC director-general Vinod Giri told Inc42 that most state governments will see revenue benefits if alcohol delivery is enabled. He noted that the Tamil Nadu government collected INR 32K Cr as taxes from liquor taxes in the financial year 2019.
