Exclusive: FreshToHome likely to enter unicorn club with $100mn funding

SUMMARY

FreshToHome is looking at doubling its valuation to over $1 Bn in its Series D funding round

Abu Dhabi Investment Office and Investcorp are likely to participate in the funding round

FreshToHome’s last funding round was in 2020, when it raised $121 Mn in Series C

D2C meat and seafood startup FreshToHome is eyeing a Series D funding round at a post-money valuation of over $1 Bn, sources aware of the matter told Inc42.

The new funding round may see participation from Abu Dhabi Investment Office (ADIO) and existing investors like private equity firm Investcorp, valuing the Bengaluru-based startup at over $1 Bn, the sources said.

The new round will see participation of investors from Dubai, Bahrain and Saudi Arabia, where FreshToHome has expanded its offerings aggressively over the past couple of years, a source said.

The startup is looking to raise $100 Mn-$150 Mn in the Series D round, the sources added.

FreshToHome cofounder and CEO Shan Kadavil has been camping in the UAE for the past month and talking with investors to finalise the contours of the deal.

Inc42 reached out to FreshToHome for a comment on the fundraise, but it declined to comment on the issue.

FreshToHome had last raised $121 Mn in its Series C funding round led by Investment Corporation of Dubai (ICD), the principal investment arm of the Government of Dubai; private equity firms Investcorp and Ascent Capital; US government’s development finance institution DFC, the Allana Group; and other investors.

While the startup had not disclosed its valuation during the Series C round, it was valued at $350 Mn-$400 Mn as per multiple media reports.

Investcorp India head Gaurav Sharma told Reuters in an interview last year that the PE firm was working with an investment bank for a fresh investment in FreshToHome which could take the startup’s valuation above $1 Bn.

Meat Startups Gain Spotlight

The online meat ordering and delivery space has been growing in India over the last few years. The Covid-19 pandemic gave further boost to the startups in the segment.

While FreshToHome has not raised funding since 2020, its Bengaluru-based rival Licious raised over $200 Mn through an extended Series F funding round last year. Licious also became the first D2C meat brand to enter the coveted unicorn club when it raised $52 Mn in October 2021.

Tiger Global-backed Capital Fresh, another industry player, touched $500 Mn valuation mark in March this year when it raised $50 Mn in a Series B funding round. The B2B fish and seafood startup said at that time that it was looking to expand to overseas geographies like the US and Europe.

FreshToHome claims that it delivers 1.5 Mn D2C orders per month and has an annualised sales run rate of $85 Mn. The startup enables its marketplace sellers to source and sell high-quality meat and fish directly from livestock farmers and fishermen, and is present in most major Indian cities and the UAE.

The startup was co-founded in 2015 by serial entrepreneur Shan Kadavil and Mathew Joseph and counts Zynga founder Mark Pincus, Google Ventures CEO David Krane, Fortress Chairman Pete Briger, Mashreq Bank Chairman Abdul Aziz Al-Ghurair, and Sequoia’s Rajan Anandan among its early backers. The startup has raised funding of $152 Mn till date.

The foodtech startup’s operating revenue almost doubled to INR 16.9 Cr in FY21 from INR 8.4 Cr in FY20, while its loss widened to INR 105.9 Cr from INR 92.53 Cr in FY20, according to data sourced from Tofler.

India’s meat industry is expected to achieve sales of $80-$85 Bn by 2024 and is ready for disruption by online players, according to a report by consulting firm Redseer. The gross merchandise value of online meat selling platforms has grown 2x since the onset of the pandemic and the trend is likely to intensify, which will make the sector one of the keenly watched out ones in near future, it added.