Pune-based fast food chain Faaso’s has raised $5 million (Rs 25 crore) from Sequoia Capital for an undisclosed minority stake. However, the company has declined to specify details of the stake sale.
The monies will be used to raise the number of outlets to 50 in the next 18 months, from the existing 16 outlets located in Mumbai and Pune. The fast food chain has further plans to open around 200-300 outlets during the next 3-4 years in Delhi-NCR, Hyderabad and Bangalore, Jaydeep Barman, co-founder of Faaso’s, told VCCircle on the investment.
According to Barman, Faaso’s targets customers in the age group of 20-35, such as college-goers and young couples without kids. It serves veg wraps such as paneer, potato, mushroom and salads, and non-veg fillings such as egg, chicken, mutton, prawn and fish.
Currently, the fast food market in India is estimated to be around $10 billion and it is growing at the rate of 20-25 per cent per annum. Consequently, similar deals had taken place in the fast food and restaurant space. In May 2011, ICICI Venture Ltd, India’s leading private equity fund, has acquired 10 per cent stake in Gurgaon-based fast food & merchandise retail chain Devyani International Ltd, for a total consideration of $55.70 million. Devyani International owns and operates fast food retail chains including Pizza Hut, KFC and UK-based coffee chain Costa Coffee. It also runs Disney Artist outlets in India.
In another significant deal last year, Kohlberg Kravis Roberts (KKR), New Silk Route and Standard Chartered Private Equity had acquired 20 per cent stake in Bangalore-based Coffee Day Resorts & Hotels Ltd for $200 million. The fund is being used to increase the number of retail outlets in India and also to expand its business in countries like Pakistan, the UAE and Austria.
Also, TVS Shriram Growth Fund, managed by TVS Capital Funds Ltd, has recently invested an undisclosed amount in Indian Cookery Pvt Ltd that owns multiple Indian cuisine restaurant brands. The proceeds are being used to open 300 outlets over the next five years. The fund has made another investment of $11.1 million in Gurgaon-based Om Pizzas & Eats Pvt Ltd in 2010.
