Bread Brand The Health Factory Nets $3.5 Mn From Peak XV’s Surge, Others

Mumbai-based bread brand The Health Factory has bagged $3.5 Mn (INR 29.2 Cr) in a seed funding round led by Peak XV Partner’s accelerator programme Surge. 

The round also saw participation from a host of its existing investors, including Kartik Mehta, (head of equity sales at ICICI Securities), Aliasgar Tambawala (head, family office at Klay) and Sunil Tulsiani (managing partner at Prodigitz) among others.

The company plans to deploy the fresh proceeds to expand its offerings beyond protein and zero maida breads and scaling up its operations. 

Apart from this, the capital will also be used to fuel the startup’s research and development (R&D), logistics, workforce expansion and operations growth.

Founded in 2018 by Vinay Maheshwari and Mohit Sankhala, The Health Factory produces bakery products focused on consumer’s health and wellbeing. The company claims that the products are available on quick commerce platforms like Zepto, Swiggy Instamart, and BlinkIt.

With its presence across Mumbai, Pune, Bengaluru, Delhi, Chandigarh, Ahmedabad, Lucknow, Hyderabad and Chennai, the startup is looking to penetrate into retail chains across tier I and II markets.

It also aims to onboard new products to its portfolio amid rising demand for nutritious bakery products among the consumers.

Maheshwari said, “This investment will enable us to disrupt additional markets with our health-focused offerings. We have received interest from numerous tier I and II cities, and this funding will allow us to expand our reach to more pin codes, ensuring our products are accessible to more consumers seeking healthier options.”

The company claims to have witnessed a 65X growth in its sales over the past two years and aims to increase its retail footprint. 

The investment comes at a time when new age startups are focusing on healthier alternatives to existing array of food products. For instance, last week, D2C health food brand Alpino, which offers a range of peanut-based products, has secured funding from actor Shilpa Shetty and other angel investors, including Paresh Ghelani. 

Notably, India’s direct-to-consumer (D2C) market is likely to reach a size of $100 Bn by 2025 as per a report by Inc42. In the D2C space, the F&B industry commands a 27% share, just after the beauty and personal care segment at 28.6%, according to Inc42’s analysis. 

Homegrown entrepreneurs have found the food and beverage market lucrative with the increasing cravings and interest in different cuisine, hence, it is expected to to $68 Bn by 2030, as per Inc42.