Direct-to-consumer meat delivery brand FreshToHome has closed $104 million (Rs 861.3 crore) in a Series D round led by Amazon Smbhav Venture Fund, a top executive told VCCircle.
"The fresh capital would be used to deepen FreshToHome's presence in the 160 cities cities it currently operates in," founder and chief executive Shan Kadavil said in a telephonic interaction.
In a bid to focus on omnichannel going ahead, the meat deliverer is also looking to expand into Saudi Arabia, Kadavil added.
FreshToHome's foray into Saudi Arabia will be its second bet in the West Asian region after it launched operations in the United Arab Emirates two years ago. UAE currently contributes 15% to the company's overall revenue.
"In the future omnichannel will be a focus. Today 20% of our new users are coming from stores, as a consumer brand this helps as customer acquisition is one of the big costs.”
The current funding round witnessed the participation of existing investors, including Iron Pillar, Investcorp, Investment Corporation of Dubai, Ascent Capital, and others, who have also participated in this round. New investors like E20 Investment Ltd, Mount Judi Ventures and Dallah Albaraka also participated in the round.
VCCircle was first to report the development in July last year. However, in September, according to people in the know, the startup's talks with investors like L Catterton and Amazon were called off due to differences in valuation and issues with growth potential. As a result, FreshToHome's plans to achieve unicorn status came to a halt at that time.
While Kadavil declined to comment on the valuation, he did say that the company is operationally profitable.
“We are now a ‘proficorn’ with operational profitability across the company. As we strive to offer more value to our farmers and fishers, customers, employees, and investors, our focus is on profitability and sustainable value creation,” he said.
“Over the last few years, we have built a strong presence. Since we source straight from farmers, our overall gross margin stands at around 40%. Our biggest advantage is sourcing, the ability to buy things at an attractive price and sell them at a mass market price, as we are positioned as a value brand. Due to this, our target market does not get saturated like how it happens in a premium segment."
JP Morgan acted as the placement agent to FreshToHome for the fundraise.
Before starting FreshToHome in 2015, Kadavil was previously heading the India vertical of online game-maker Zynga Inc.
FreshToHome - who delivers poultry, meat, and seafood to your doorstep - claims to cater to over 2 million orders a month across over 150 towns in India and majority parts of the UAE. The platform enables its sellers to source meat and fish directly from livestock farmers and fishermen and supplies fresh produce at mass-market prices in all major Indian markets, including Delhi-NCR, Uttar Pradesh, Rajasthan, Punjab, Haryana, Karnataka, Andhra Pradesh, and Telangana, as well as Tamil Nadu, Kolkata, and Kerala.
The company competes with the likes of Licious, which also claims itself to be the first unicorn among consumer-facing startups. Licious too had in March this year raised $150 million in an extended Series F round of funding led by Singapore-based Amansa Capital.
Captain Fresh is another player in the segment which has recently received a big-sized cheque from the likes of Prosus Ventures (formerly known as Naspers Ventures) and Tiger Global Management. FreshToHome, on the other hand, had last secured its equity funding in October 2020. It mopped up $121 million in its Series C funding round led by the Investment Corporation of Dubai (ICD), the Gulf emirate’s sovereign wealth fund, and Bahrain-based alternative investment firm Investcorp. It bagged $20 million in a Series B funding round led by Iron Pillar in August 2019 and three months before that pocketed $11 million in its Series A financing.