Bengaluru-based startup VRO Hospitality has raised $3 Mn (INR 22.5 Cr) through a mix of equity and debt funding in its Series A funding led by CreedCap Asia Advisors along with other undisclosed angel investors.
The hospitality startup aims to utilise the fresh funding to expand its footprint into Mumbai, Goa, and Chennai. About 80 percent of the fresh capital will go into new projects, remaining would go for technology and team building, cloud kitchen brands, said a statement.
Founded by Dawn Thomas, Safdar Adhoor, and Sharath Rice almost a decade back, VRO Hospitality owns and operates F&B brands such as Mirage, Hangover, Badmaash, Nevermind, and Tycoons among many others in Bengaluru.
In the past 12 months, the hospitality chain has also acquired F&B brands like Fava, Café Noir, Plan B, Caperberry, and One Night in Bangkok and has also ventured into cloud kitchen brands with Burgers and Beyond, Holy Dah Pizzas and Smashed.
Cofounder of VRO Hospitality, Dawn Thomas said, “We are focussed on our growth mode and this fresh round of funding will help us to stay on the trajectory for success.”
VRO Hospitality operates multi-format restaurants, cafes, and lounges across 18 outlets in Bengaluru. The founders’ previous venture, an event curator platform SteppinOut, was acquired by Dineout, the restaurant services and reservation platform owned by Times Internet in July.
Vishal Pereira, Managing Director at CreedCap Asia, said, “This decade, F&B brands will be hybrid in nature of operations and own the online/offline experience for customers.”
VRO, which employs 600 people, said that it is running at a 20% operating profit and its revenues have increased by 4.1x since October 2020.
“We are planning to add 16 new projects across five cities including Bengaluru, Goa, Mumbai, Kochi, and Chennai. By the end of the financial year, we also plan to take some of our brands pan-India and also to Singapore and Dubai,” said Dawn.
At a time when the hospitality industry has been severely impacted by the pandemic, VRO’s multi-pronged focus on the sector including the online food industry and cloud kitchens is a significant move by the company.
CreedCap Asia Advisors is a Bengaluru-based boutique investment banking firm, founded in 2010, that provides startups and SMEs with financial advisory services such as Capital Syndication, Business Restructuring and Strategic Advisory with a focus on healthcare, consumer, information technology, real estate and industrial related businesses.
According to Research & Market, India’s online food delivery market, which was valued at $4.66 Bn in 2020 is expected to grow into a $21.41 Bn industry by 2026. Besides Zomato and Swiggy, India has several food delivery applications, including Domino’s and Faasos, among others.
India’s Cloud Kitchen market is also poised for a sharp growth. The market, which comprises players including Curefoods, Charcoaleats, Food Darzee, Healthie, Behrouz Biryani, Box8, among others, is expected to be valued at $1.05 Bn by 2023, as per an Inc42 report.