The ready-to-cook startup’s total revenue jumped 1.3X to INR 383.5 Cr from INR 281 Cr in FY21
The startup’s total expenses rose to INR 454 Cr in FY22 from INR 308.8 Cr in FY21
In January 2022, the startup raised INR 507 Cr in its Series D round to foray into international markets
Ready-to-cook products maker iD Fresh Food has seen its losses soar by 2.5X in the financial year ending on March 31, 2022. The Bengaluru-based startup posted a total consolidated loss of INR 70.3 Cr in FY22, a significant jump from INR 27.7 Cr it had witnessed in FY21.
The total FY22 revenue jumped by 36.4% to INR 383.5 Cr from INR 281 Cr in FY21 largely on the back of international expansion and new product launches. However, this also led to higher expenses — INR 454 Cr in FY22 compared to INR 308.8 Cr in FY21, a rise of 47%.
Revenue Jumps On Back Of Global Expansion
Bulk of the company’s revenue has come from operations (INR 381.6 Cr in FY22 vs INR 280 Cr in FY21) and the growth can be attributed to growing traction in the Middle East as well as the launch of new SKUs.
Cofounder P.C. Musthafa claimed recently that the United Arab Emirates (UAE) contributed 25% to 30% to the startup’s revenue in FY22. Besides this, the startup has also expanded its operations to the UK and US.
In the past fiscal year, iD Fresh Foods ventured beyond idli and dosa batter and forayed into filter coffee, packaged food items such as ready-to-cook parathas, bread and dairy products. It also added ghee to its product portfolio and expects to bring in revenue of INR 100 Cr through this alone.
Moreover, the launch of iD Fresho in partnership with Tata-backed online grocery platform BigBasket has also helped the startup boost revenue through other channels.
Expenses Under Lens
In terms of the expenses, iD Fresh Foods had a significant increase in the cost of material consumed. This is largely due to the entry into new product categories.
It spent INR 135 Cr on material consumed during FY22 as compared to INR 98 Cr a year ago – a 35% increase in this regard.
Meanwhile, the company spent INR 92 Cr for employee benefit expenses, 27% higher than the INR 72.3 Cr it had spent in FY21. A rise in employee benefit expenses is a clear indication that the company has increased its employee headcount as compared to last year, which can also be put down to its new launches and geographical expansion.
For advertising and promotional activities, the startup had spent INR 28 Cr in FY22, a 130% jump from INR 12 Cr it had spent for the same cause in FY21.
Founded by Musthafa, Abdul Nazeer, Shamsudeen TK, Jafar, and Noushad TA in 2005, iD Fresh Food sells packaged ready-to-cook and frozen food products to more than 45 cities, across 30,000 retails stores in India, US, and the UK.
The startup enjoys backing of investors such as Premji Invest, Helios Venture Partners, NewQuest Capital, among others. In January 2022, it raised INR 507 Cr ($68 Mn) in its Series D round of funding from NewQuest Capital Partner and Premji Invest. To date, the startup has raised a little of $99 Mn in total funding.
In July 2022, iD Fresh Food granted ESOPs worth INR 46 Cr to 27 of its employees including drivers and helpers, taking the total ESOP grant to INR 300 Cr in its lifetime.
New Products, New Competition
One potential challenge for the company is that it is foraying into a new product category and this puts it in competition against several D2C brands. For instance in the filter coffee segment, it is competing against the likes of Rage, Sleepy Owl, Blue Tokai among other well-funded players. In terms of dairy products, it is locking horns with Country Delight, Milk Mantra, Happy Milk, among others.
Even in read-to-cook products it has to contend with MTR, Haldirams, Gits, Rentio Foods, Tata. ITC and a host of other players in this long-tail segment.
In order to compete against such heavy giants with deeper pockets and already significant market presence, iD Food Fresh will likely have to spend heavily towards brand building, marketing, product development and distribution.
With a loss of INR 383 Cr in FY22 just a few months after it raised INR 507 Cr, iD Fresh Foods could soon be in the market for funding by the end of FY23. In fact, as per a Mint report, the startup is looking to raise $100 Mn from PE investors.
So iD Fresh Foods has plenty to prove besides turning around its loss-making streak.