Cloud kitchen Rebel Foods raises $5 mn from venture lender Alteria Capital

Rebel Foods, the Mumbai-based cloud kitchen company known for brands such as Faasos and Behrouz Biryani, has raised nearly $5 million (Rs 35 crore) from venture lender Alteria Capital. The latest infusion takes the total debt raised by the company so far to nearly $12 million, the company said in a statement.

A little over half of the overall debt capital raised by Rebel Foods so far has come from Mumbai-based Alteria, according to data compiled by VCCEdge.

The debt round comes under six months after Rebel Foods, founded in 2011 by former McKinsey & Co executive Jaydeep Barman and Kallol Banerjee, raised a commitment of around $76 million from New York headquartered hedge fund Coatue Management as part of an extended Series D or growth round.

Bloomberg had earlier reported the size of the Series D round at $125 million, which it said came from New York headquartered investment bank Goldman Sachs, Coatue and Indonesian delivery service Go-Jek. TechCircle reported in July last year that Go-Jek invested $5 million in the company, valuing it at $375 million.  

Rebel Foods operates 12 restaurant brands including Faasos, Oven Story, Behrouz Biryani, and Mandarin Oak. It also has overseas operations in Southeast Asia and Europe and overall runs 325 cloud kitchens. 

“Much of our investments go into building state of the art, automated kitchens and venture debt raised by us from Alteria helped us keep our cost of capital lower than equity raise. It has given us a significantly longer runway on our equity funding,” Barman said. 

Alteria Capital, currently investing from a $140 million maiden fund, is also an investor in delivery platform Dunzo, fintech startup Lendingkart Technologies, health-tech platform Mfine, online educational startup Toppr and scooter sharing app Vogo, among several other startups. 

Listen: Alteria founders Ajay Hattangdi and Vinod Murali on navigating India’s venture debt market

“We have witnessed the phenomenal growth as well as successful diversification of brands adopted by the company (Rebel Foods). The overseas strategy is well timed as it allows for better efficiency and the business has a robust Indian base,” Alteria founder and managing partner Vinod Murali said.

In FY19, Rebel Foods widened losses to Rs 130 crore from Rs 74 crore on account of cash burn, which increased two-fold to Rs 441 crore. However, revenues grew 108% to Rs 310 crore. 

While Rebel Foods is well ahead in the cloud kitchens game compared to Bengaluru-based FreshMenu, food delivery majors Swiggy and Zomato have recently entered the market creating new competition for the company. Recently, ANI Technologies-owned shared mobility platform Ola, which acquired FoodPanda, said that it would incubate private brands for its cloud kitchen business. It also launched its first private brand Khichdi Experiment in October.