Exclusive: Cloud kitchen startup InnerChef secures fresh funding

Cloud kitchen startup InnerChef Pvt. Ltd has raised around $1.76 million (Rs 13 crore at current exchange rates) in a fresh funding round from new and existing investors, two people familiar with the development told VCCircle.

Japanese venture capital firm-cum-accelerator Mistletoe, which has invested in Gurugram-headquartered InnerChef previously, led the investment according to one of the above-mentioned persons. Mistletoe is owned and funded by serial entrepreneur Taizo Son, the brother of Japanese investment giant SoftBank’s chief executive Masayoshi Son.

The person added that another existing backer, Singapore-based VC firm M&S Partners, had also contributed while Japan’s Das Capital came in as a new investor. There were other investors involved as well but their identities could not be ascertained.

A second person said that InnerChef is likely to have raised this money at an estimated valuation of $25 million (around Rs 184 crore).

E-mail queries sent to InnerChef co-founders Rajesh Sawhney and Bal DiGhent did not elicit a response till the time of publishing this report.

Before the latest infusion, Inner Chef had raised $610,000 from Ukraine-based investment firm Chernovetskyi Group and early-stage venture fund 500 Startups in December last year, according to NewsCorp VCCircle’s research arm VCCEdge. https://www.vccedge.com/

In October 2016, InnerChef had raised $2.5 million (Rs 16.77 crore then) in a funding round led by Mistletoe with participation from M&S.

InnerChef

Started in 2015 by Sawhney, Bal DiGhent and Sanjeev Singhal , InnerChef offers do-it-yourself food kits — ready-to-eat meals and ready-to-cook meals and desserts. It is currently operational in Delhi-NCR, Bangalore, Hyderabad and Mumbai and ships more than 100,000 meals per month.

It also operates Indulge, a hyperlocal desserts marketplace where home bakers and neighbourhood bakeries can offer their products to customers. A related offering, Indugle+, focuses on healthy eats.

Besides, the company has also launched two food brands named Healthie.in and Yum Yum South. While Healthie.in was founded in August last year with the objective of promoting healthy food and lifestyle, Yum Yum South looks to popularise South Indian dishes.

In March 2016, InnerChef had acqui-hired two startups—Bengaluru-based EatonGo and Gurugram-based Flavour Labs.

In an interaction with TechCircle in December last year, Sawhney had discussed plans to add more kitchens and take the number to 40. Besides, he added that the the firm was looking to leverage artificial intelligence (AI) and data analytics to enhance customer experiences and offer broader food choices.

Sawhney is also the founder of Gurugram-based incubator GSF Accelerator. A serial entrepreneur, he  founded Times Internet in 1999 and served as its chief operating officer till 2005. He was also the founding president of Reliance Entertainment.

InnerChef’s operational revenues rose four-fold to Rs 9.51 crore in the financial year 2016-17, up from Rs 2.26 crore in the previous fiscal, as per VCCEdge.

Gross expenditure also showed a three-fold rise at Rs 25.70 crore, an increase from Rs 7.77 crore in 2015-16. Consequently, net losses widened to Rs 11 crore, up from Rs 3.87 crore.

Deals in the space

After a two-year lull, there has been heightened dealmaking activity in the food-tech space in 2018.

In June, online food delivery startup Swiggy secured $210 million (around Rs 1,400 crore) in a Series G investment round led by South African technology conglomerate Naspers and Yuri Milner-led DST Global, catapulting it to the hallowed unicorn club of startups valued at $1 billion or more.

Three months before that, it had raised $100 million in a Series F round.

Main rival Zomato had in February raised $200 million from Chinese e-commerce giant Alibaba’s payment affiliate, Alipay. The deal valued the firm at more than $1 billion.

In August, Pune-based quick service restaurant chain and online food delivery company Faasos raised $15 million (Rs 102.9 crore) in a round led by Russia’s venture capital firm Sistema Asia Fund Advisors and Evolvence India Fund.

The same month, restaurant reservation startup EazyDiner Pvt. Ltd, founded by media personality Vir Sanghvi, closed its Series B round.

In July, Bengaluru-headquartered HungerBox, an online platform that connects caterers and corporates, raised $4.5 million (Rs 31 crore) in a Series A investment round led by South Korea-based investment firm Neoplux and India-centric mid-market private equity firm Sabre Partners.

Meanwhile, Foodpanda India, an online takeaway food delivery firm bought by homegrown cab-hailing major Ola last year, is reportedly in the process of acquiring shuttered startup Holachef,