Exclusive: Food-tech startup Holachef raises fresh funds

Food-tech startup Holachef has raised Rs 2 crore ($311,200) from Ashok Kumar Gajera, director at Mumbai-based diamond manufacturer and distributor Laxmi Diamond Pvt Ltd, a person directly familiar with the development told Techcircle.

The company is likely to have raised this sum at the same valuation as its $5-million Series B funding round, the person mentioned above stated. As per VCCircle estimates, the current fundraise will likely value the four-year-old startup at roughly Rs 177 crore ($27.4 million) post-money.

The Mumbai-based food-tech venture has raised a total of $4.8 million in its Series B round in two tranches—in April 2017, it raised Rs 19.5 crore ($3 million) from SIDBI Venture Capital Ltd and existing investor Kalaari Capital. In July 2016, Kalaari Capital and India Quotient infused Rs 13 crore ($1.95 million) into the firm.

It last raised funds in December 2017, when it secured Rs 8.95 crore ($1.38 million) through a mix of equity and debt from Rajasthan-based software publishing and consultancy firm IPI Technolab Pvt. Ltd and Innoven Capital. It was unclear whether the equity financing was a top-up to the company’s Series B round. If so, the total funds raised in that round would be $5.56 million.

In June 2015, the company raised Rs 20 crore in a Series A round led by Kalaari Capital and India Quotient.

E-mail queries sent to Laxmi Diamond and Saurabh Saxena, co-founder and chief executive of Holachef, did not elicit a response till the time of filing this report.

For the financial year 2016-17, Holachef registered a 65% rise in operational revenues at Rs 18.51 crore, up from Rs 10.93 crore in the previous year. The company’s total expenditure showed a 25% rise at Rs 45.55 crore, up from Rs 36.19 crore in the previous year. Consequently, net losses widened marginally to Rs 26.27 crore, up from Rs 24.87 crore in the previous year.

Holachef, operated by Holachef Hospitality Pvt. Ltd, was launched by Saxena and Anil Gelra in 2014. It delivers ready-to-eat home-cooked food to consumers. It has in-house chefs who prepare signature dishes, which include Indian and global cuisines, besides desserts, beverages, munchies, and soups and salads. Currently, Holachef operates only in Mumbai and caters to over 100 pin codes in the city.

Established in 1972, Mumbai-headquartered Laxmi Diamond manufactures and distributes polished diamonds and also supplies loose diamonds. It owns diamond manufacturing and polishing facilities in Gujarat and a jewellery unit of over 10,000 square feet in Mumbai and Surat.

Reviving fortunes of food-tech in India
The food-tech sector was largely ignored by investors through the major part of 2016 after numerous startups, such as TinyOwl, had to shut shop, while well-funded larger players like Foodpanda ran into rough weather.

But the sector has revived with major players like Zomato and Swiggy raising big-ticket funds.

Earlier this month, Swiggy raised $100 million (Rs 640 crore) in its Series F round led by existing investor South African Internet and entertainment group Naspers. Chinese e-commerce service platform Meituan-Dianping came on board as a new investor.

In the same month, Info Edge (India) Ltd, Zomato’s largest stakeholder, disclosed in a stock exchange filing that the online restaurant discovery and food delivery company will raise $200 million from Alipay, the payment affiliate of Chinese e-commerce giant Alibaba

Last month, homegrown cab-hailing major Ola acquired the Indian business of food delivery platform Foodpanda from its Germany-based parent Delivery Hero in an all-stock deal. This was also accompanied by a $200 million investment by the cab-hailing major.

These large fundraises came after a period of correction and consolidation in the food-tech sector. Between 2015 and 2016, 24 mergers and acquisitions took place, while in 2017, two business models— restaurant marketplaces and cloud kitchens—evolved. Statistics from VCCEdge, the data research arm of News Corp VCCircle, show that while the number of deals fell in 2017, their value rose as compared to 2016. In 2015, the food delivery space saw 63 deals worth $274 million. The number of deals fell to 43 in 2016, amounting to a mere $78 million. Though 2017 saw 20 funding deals, the total cumulative value of those investments was $124 million.