Bengaluru-based fruits and vegetable delivery startup FreshWorld has acquihired Bengaluru-based meat delivery startup Royale Fresh in all equity deal. As part of the deal, Royale Fresh will continue to operate as a separate entity.
According to the filings accessed by Inc42, Royale Fresh has been valued at INR 2 Cr while FreshWorld has been valued at around INR 65 Cr. Freshworld founder Rajiv Rao said that Royale Fresh’s acquihire will help the startup to foray in a segment which is adjoining to grocery delivery.
Founded by Rao in 2013, FreshWorld delivers fruits and vegetables straight from farms to homes. But instead of sending fruits and vegetables on a bike, FreshWorld delivers them via carts.
The company claims its model helps users select vegetables before buying them. Also, these carts are equipped with a tablet for digital payments and printer to provide a receipt, track inventory and analyse data to understand customer purchase behaviour. Rao said that FreshWorld, which is backed by the likes of Infosys’ Kris Gopalakrishnan, has an unparalleled capability of providing instant gratification to users with a touch and feel.
On the other hand, Royale Fresh is an online retailer of meat and chicken products. Besides its own delivery operations, Royale Fresh also delivers fresh meat through Swiggy and Dunzo. It sends vacuum-packed meat packets which are said to be free of steroids or hormones.
Rao said that all the vegetable delivery carts, which delivers groceries in about 45 societies in Bengaluru, will help in increasing orders for Royale Fresh by taking preorders for meat. The carts will also encourage users to buy meat from Royale Fresh’s walk-in outlets as well.
Delivery-only outlets of Royale Fresh will also be converted into customer-facing stores. Freshworld will also build Royale Fresh brand through its alliances. With the acquihire, FreshWorld is expecting a revenue of INR 1.2 Cr per month within the next six months.
As of now, Royale Fresh is selling only chicken and mutton on the platform. After the acquihire, Royale Fresh will expand its product suite by adding fish, cold cuts, and marinated products. FreshWorld will also list all the products of Royale Fresh on the mobile and online platforms. “We have just launched a customer application which will help us achieve better unit economics and facilitate higher revenue,” Rao said.
In addition to the acquihire, FreshWorld is also looking to raise INR 2 Cr from existing and new investors. The funds are expected to be utilised for marketing and brand building of FreshWorld and Royale Fresh. This transaction was advised by CreedCap, a boutique investment banking firm.
As of now, BigBasket and Grofers are leading the grocery delivery segment while the likes of FreshToHome and Licious have consolidated their positioning in the meat delivery space. But as there are thin lines between the nature of these businesses, other hyperlocal delivery startups are also excelling in the segment.
In the grocery delivery space, food delivery players like Zomato and Swiggy have recently marked their presence while ecommerce majors Flipkart and Amazon are strengthening their position. The segment has also witnessed the entry of players like social commerce startup Meesho, ecommerce players Shopclues among others, thanks to the nationwide lockdown which has spiked online orders of groceries and staples.