Motilal Oswal Backs Snackmaker Happilo, Invests $25 Mn To Help Scale Startup

D2C healthy snacking brand, Happilo, has raised $25 Mn in funding from Motilal Oswal Private Equity (MOPE).

Commercial services firm, Deloitte, served as the advisor to Happilo on the transaction.

The startup will use the funding to scale up business, expand product lines, acquire more food brands and streamline the distribution network. 

Founded in 2016 by Vikas Nahar, Happilo is an omnichannel healthy snacking brand that offers a slew of products including dry fruits, trail mixes, nut protein bars and muesli.

The startup claims to have grown its business 4X in the last 24 months. Add to that, it is reportedly eyeing a revenue target of INR 2,000 Cr in the next four years 

Speaking on the announcement, Happilo CEO Vikas Nahar said, “Partnering with MOPE will help accelerate our growth plans and significantly scale the business from current levels. Their prior experience of investing and working with category leaders within the food and beverages segment will add significant value. The investment would be used for significant product expansion across healthy snacking categories, acquisition of synergistic food brands, brand building, capacity expansion and deepening the distribution infrastructure.”

The announcement comes barely a year after Happilo raised $13 Mn in its maiden funding from A91 Partners in February of 2021.

According to Statista, the Indian snack food segment would grow to $56.30 Bn in revenue by this year itself, growing at a CAGR of 9.21%. Add to that, another report by ET pegs the organised Indian packaged snacks market to be around INR 45,000 Cr.

This tremendous growth has been enabled by hyperlocal delivery hit by the pandemic. While it severed supply chains for many renowned brands, many such local players and startups stepped up to fill the gap. 

This shift to D2C has also been triggered by a growing class of health-conscious Indians that are more aware about the products they are consuming. In addition to this, selling online also helps startups focus more on catering directly to the customers while leveraging the ecosystem of logistics and ecommerce enablers.

Echoing the sentiment, MOPE CEO, Vishal Tulsyan, said, “As the country increasingly moves online, they believe the digital channels will be a strong enabler for consumer businesses to scale at a rapid pace. Our investment in Happilo marks our entry into the tech enabled consumer franchisees who have the first mover advantage in large unorganised categories.”

Happilo competes with other players in the segment including Snackible, Yummiano, True Elements and The Whole Truth.

This comes barely days after natural healthcare company, Dabur, launched its range of healthy snacks and dryfruits under the ‘Real Health’ brand. 

Earlier today, a bunch of media reports stated that savouries and sweets manufacturer, Bikaji Foods, was planning to file its draft red herring prospectus (DHRP) this week itself. The company aims to raise INR 1,000 Cr in its initial public offer, at a valuation of $1 Bn.

Add to that, mobility startup Ola also announced that it would expand its quick commerce service in the coming six months. In December last year, South Korean confectionery firm, Orion, also expanded its India portfolio with the launch of a premium cookie brand.

All in all, the segment is growing at a rapid pace and backing of a big name like MOPE can surely do wonders for a startup like Happilo. Now, it remains to be seen whether the startup is able to convert those gains into a tangible market presence.