Exclusive: FreshMenu scores an inside round from Lightspeed, others

Foodvista India, which runs cloud kitchen platform FreshMenu, has raised Rs 3 crore (approximately $400,000 as per current exchange rates) from venture capital firm Lightspeed Venture Partners and serial entrepreneurs Ganesh Krishnan and Srinivas Anumolu.

The inside round -- or follow-on investment that involves only existing investors -- saw Lightspeed putting in about Rs 2.5 crore while Krishnan and Anumolu invested Rs 25 lakh each,  regulatory filings showed. 

The VC firm mobilised the amount via its two funds -- Lightspeed India Partners I and Lightspeed Venture Partners X, Mauritius.

The company issued a total of 11,579 Series B1 compulsorily convertible participative preference shares at Rs 2590.86 per share to the investors.

According to the filings, the fresh funds will be utilised for capital expenditures, marketing and general corporate purposes.

E-mail queries sent to Rashmi Daga, founder of FreshMenu, seeking more information on this round of funding did not elicit a response at the time of filing this report.

The round takes FreshMenu’s overall funding to $29 million.

In its last round, the Bengaluru-based company raised $500,000 in a bridge round from independent corporate trustee and corporate services provider Vistra ITCL (acting as the trustee of Zodius Technology Fund) in August last year. 

In January 2019, TechCircle reported that Freshmenu had raised $2.94 million in a fresh funding round from existing investors Lightspeed Venture Partners, Zodius Technology fund and Ganesh Krishnan of Growthstory.

FreshMenu had put itself on the block last year after facing operational pressure headwinds.  TechCircle, citing people directly in the know, reported that talks with SoftBank-backed OYO for a potential acquisition fizzled over disagreements on valuation.

Its last major funding round was in January 2016 when it raised $17 million at a valuation of nearly $41 million. Prior to that, it had raised $5 million in a Series A funding round of funding from Lightspeed Venture Partners in early 2015.

FreshMenu primarily competes with multi-brand cloud kitchen companies Rebel Foods, Box8, and InnerChef.

According to regulatory filings last month, Rebel Foods is set to raise between $47.2 million and $49.8 million from returning investor, technology focussed hedge fund Coatue Management. 

Inside rounds and bridge rounds have become frequent in the country’s early-to-growth dealmaking market due to the Covid-19 crisis-induced funding crunch. 

Over 15 such deals were registered in the last two months. 

Inside rounds in trying circumstances, such as the Covid-19 crisis, often take place at discounted valuations -- commonly at the same valuation as the last round or lower -- though the same could not be verified with respect to the FreshMenu transaction or the other deals cited above.