As Indian retail landscape continues to be shaped by direct-to-consumer (D2C) brands, gourmet snacking brand Happilo has raised INR 100 Cr ($13.6 Mn) from A91 Partners to capitalise on the 3x growth it witnessed during the pandemic. This is the first external funding round for the company.
Founded in 2016 by Vikas Nahar, Happilo competes with snack brands such as Nutty Gritties, Cornitos, Rostaa and others in the nuts and dry fruits snack segment. The company has been bootstrapped so far and banking on its growth to scale up. It claims to have an annual revenue run rate of INR 180 Cr.
Happilo intends to use the funds raised for capital expenditure, automation, marketing expansion and distribution capabilities. “The capital raised will be used for capital expenditure, for automation and to expand marketing and distribution capabilities,” said Vikas Nahar, Founder-Director at Happilo. “We are well capitalised for another 12-18 months, post which we might again hit the market for capital raising.”
The company takes an omnichannel approach, with ecommerce making up for about 60% of the company’s total sales typically.
Commenting on the deal, A91 Partner’s Abhay Pandey said, “Happilo’s progress without any external capital is very impressive. Now they have a unique opportunity to leverage their omnichannel capabilities to lead a large and important category in India towards getting organised.”
Similar growth has been witnessed by several others in D2C brands in the last year as ecommerce took centre-stage and mature audiences looked for newer brands during the Covid-19 lockdown. Several brands decided to make the shift to online selling by focusing on catering directly to the customers, leveraging the ecosystem of logistics, ecommerce enablers and hyperlocal delivery apps.
This approach not only helped the brands create an alternate source of revenue, but also create a network of loyal customers. This further enables them to study customer preferences closely and create products or tweak them accordingly. Meanwhile, the customers also get the opportunity to interact more closely with brands and pass on feedback.
Some of the top players in the Indian D2C segment are Lenskart, Licious, Zivame, Epigamia, BoAt, Wow Skin Science, Healthkart, Mamaearth, MyGlamm, SUGAR Cosmetics, IncNut, Country Delight, among others.
BoAt recently raised $100 Mn from an affiliate of Warburg Pincus, the New York-based private equity firm it localise its production, which was disrupted during the pandemic. In the snacks and foods category, breakfast snack brand True Elements raised INR 10 Cr from SIDBI in January this year.