Swiggy aims for promising IPO in 2024, banking on Instamart’s profitability

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September 7, 2023

Swiggy’s intention to go public appears promising, given the strong profitability of its food delivery operations. Furthermore, the company has established a profit objective for its grocery delivery division, known as Swiggy Instamart.

Following intense competition in the rapid commerce sector for approximately two years, it has come to light, through insights from three well-informed sources, that discounting and expenses related to acquiring consumers are beginning to stabilize.

“Swiggy has been witnessing significant improvement in Instamart’s economics in the July-September quarter,” said one of the sources requesting anonymity. “Encouraged by the level of efficiency [consumer acquisition cost and repeat purchases], the company has set an internal target to make Instamart profitable by March-April 2024.”

The profitability of Instamart is expected to be the catalyst for the company’s anticipated listing in August-September 2024. Entrackr was the initial source to report on Swiggy’s plans for a public listing and the profitability of its food delivery segment back in February.

According to a report by Reuters, Swiggy has extended invitations to JP Morgan, Morgan Stanley, and Bank of America to prepare the company for its upcoming IPO next month.

“If the company manages to bring Swiggy Instamart in [the green], it will be a sort of turnaround as it bled heavily in the past year,” said the second source who also wished not to be named.

No immediate response was received from Swiggy in response to the queries that were sent.

Swiggy witnessed a significant increase in losses, soaring by 80% to reach $545 million in FY23, primarily attributed to substantial investments in its grocery business, as indicated by Prosus, a major backer, in their annual report. Meanwhile, the company’s earnings in the last fiscal year (FY23) reached approximately $900 million. In FY22, Instamart contributed INR 2,036 crore in revenue to Swiggy’s total income of INR 5,705 crore.

Insiders indicate that the company is currently in the process of determining its appropriate valuation for the public market, with expectations that it is unlikely to accept a valuation lower than the $11 billion mark. According to TheKredible, the firm achieved a valuation of $10.7 billion during its most recent funding round in February 2022, securing $700 million in funding.

When a grocery or rapid commerce startup focuses on achieving profitability, it typically signifies two key factors. First, it has reached a point where it deems its level of repeat usage as sustainable, allowing it to stabilize its operations before seeking new users. Second, the expenses associated with acquiring new users from this point forward are no longer sustainable. Embracing this reality and aiming for profitability often results in a substantial reduction in costs related to user acquisition and marketing. If profitability isn’t achieved in a reasonable timeframe, the startup may need to explore options such as securing additional funding or potentially seeking a buyer in the future.

No matter its level of funding, Swiggy is the kind of startup that genuinely has the opportunity for an IPO, thanks to its substantial market presence. It is expected that this move will become feasible in FY25, affording the company a brief window to maintain its growth momentum (which significantly influences valuations) without experiencing a sudden decline in its pursuit of profitability.

Mumbai-based startup Madmix valued at INR 12 Crores following successful pre-seed funding

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September 7, 2023

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Madmix, a Mumbai-based startup specializing in healthy food, formerly known as Daily Staple, and owned and operated by Mel Sante Food Production Pvt. Ltd., has achieved a significant milestone by successfully securing a substantial investment during its pre-seed funding round. The company is now valued at approximately INR 12 crores, with Prime Securities leading the investment round. Notable investors, including Authum Investments and Team India Managers, also participated in this funding endeavor.

The capital raised will be allocated towards enhancing marketing initiatives, expanding the sales team, and fueling future product development endeavors.

This well-timed infusion of capital is poised to propel Madmix into a transformative phase of growth and potential, following two years of self-funding. Despite operating with limited financial resources, the company successfully extended its global footprint, entering markets in Nepal, Hong Kong, New Zealand, and the USA. Furthermore, it has left a substantial mark in India, with its products now accessible in more than 650 stores across the country.

Moreover, coupled with Madmix’s recent rebranding and forward-looking strategy, the company is positioned to reach new heights in the realm of health-conscious and pioneering food offerings.

Madmix offers a variety of ready-to-eat snacks crafted from millets, such as jowar, featuring a selection of puffs available in five distinct flavors. Additionally, they have introduced a millet-based ready-to-cook product line, encompassing dosa, idli, chilla, bread mix, and flour mix. Madmix is dedicated to replacing unhealthy dietary choices with wholesome alternatives, and their ongoing commitment to innovation drives the development of new and nutritious products.

Gaurav Palrecha, Founder & Director, Madmix said, “We’re thrilled by the incredible support our investors have shown – it’s a true validation of our journey into the realm of madness. Consumers are becoming more conscious and are making healthy choices and we want to support them in their journey. These funds will enable us to achieve our growth numbers and we’re just getting started!“

Mr. Apurva Doshi, Sr Vice President, Equity Capital Markets, Prime Securities Limited said, “In India, snacking is more than just what we eat, it is a tradition and an important part of our cultural identity, as quoted by report ‘State of Snacking Report: A Global Consumer Trend Study’. We think the Company is revolutionising the idea of snacking with its ready-to-eat snacks and ready-to-cook range. We strongly believe in the Company’s prospects and this funding will aid the Company as it marches on in its growth journey.”

Mrs. Niru Kanodia, Director, Team India Managers Limited said, “The idea of mindful and healthy eating will drive the demand for snacking in India. We firmly believe that Madmix is rightly placed and offers balanced nutrition in every product combining with health and taste.”

Madmix, a health-focused startup with a mission to offer nutritious and delectable food items at affordable prices, is deeply committed to inventing distinctive and delightful flavors. Their team of experts is devoted to crafting innovative taste experiences that will captivate and satisfy your palate. Madmix consistently explores fresh combinations and techniques to bring you exciting and unforgettable flavors. The company’s ultimate goal is to ensure customer happiness and contentment with their products.

ZappFresh outperforms D2C meat delivery rivals with profitable growth in FY23

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September 6, 2023

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ZappFresh has maintained a more modest scale in comparison to its direct-to-consumer (D2C) meat delivery competitors like Licious and FreshToHome, who are often seen as the prominent players in the industry. Nevertheless, ZappFresh has not been at a disadvantage, as its consistent performance over the past two fiscal years clearly illustrates.

While Licious and FreshToHome have experienced substantial losses, ZappFresh has managed to maintain profitability throughout FY22 and FY23.

“We did INR 70 crore revenue in FY23,” said Deepanshu Manchanda, Founder and Chief Executive Officer of ZappFresh.

This essentially indicates that the operational revenue for FY23 remained unchanged from the INR 56 crore earnings recorded in FY22. Manchanda explained that the company’s focus on sustainable growth over the past two fiscal years, rather than aggressively pursuing expansion, was the key reason for this marginal growth.

Operating in the Delhi-NCR and Bengaluru regions, the company offers a range of fresh meat, seafood, and ready-to-cook products through its mobile app and website.

“We deliver around 4,500 orders on a daily basis with an average basket size of INR 600,” Manchanda added.

As expected, the acquisition of materials constituted the most significant cost category for ZappFresh in FY23, making up 40-50% of the total expenses, according to the founder. Meanwhile, employee benefits and advertising expenses each contributed 10% to the overall costs.

In addition, the company effectively managed its expenses in the preceding fiscal year and saw an increase in profits compared to FY22.

Manchanda revealed that the company’s FY23 profit amounted to approximately INR 3.5 crore. “…we are looking to end the ongoing fiscal with two-fold growth in profit after tax.”

The company, founded seven years ago, has accumulated over $9 million in funding thus far. The co-founders retain approximately 40% of the ownership stake, with SIDBI being the largest external stakeholder, holding 21%, according to data from TheKredible, a platform specializing in tracking startups and providing intelligence on them.

ZappFresh’s recent acquisition of Dr. Meat, valued at approximately $3 million, is expected to contribute significantly to the company’s growth.

“We are confident to hang around INR 200 crore in collection in the ongoing fiscal year,” added Manchanda.

As previously mentioned, ZappFresh’s competitors operate on a larger scale; however, they have incurred substantial losses. For instance, in FY22, FreshToHome reported revenue of INR 102 crore but also recorded a loss of INR 477 crore.

In FY22, Licious, which is backed by Temasek and is the sole unicorn in the D2C meat delivery sector, generated a revenue of INR 682 crore. However, during the same fiscal year, Licious incurred a loss of INR 855 crore. Both companies, Licious and FreshToHome, have not yet disclosed their financial figures for FY23.

Tata Group eyes majority control of Haldiram’s in $10 Billion valuation standoff

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September 6, 2023

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Tata Group’s consumer division is currently engaged in discussions to acquire a minimum of 51% ownership in Haldiram’s, a well-known Indian snack food manufacturer. However, sources familiar with the matter have revealed that Tata Group is expressing reservations regarding the proposed valuation of $10 billion.

Should the negotiations reach a successful conclusion, this agreement would position the Indian conglomerate to directly rival both Pepsi and the retail arm of billionaire Mukesh Ambani’s Reliance group.

Haldiram’s, a widely recognized brand in India, is reportedly in discussions with private equity firms, including Bain Capital, regarding the potential sale of a 10% ownership stake, as per their sources.

According to insiders, Tata Consumer Products, the owner of the UK-based tea company Tetley and a strategic partner of Starbucks in India, is currently in talks to acquire the stake.

A third individual with firsthand knowledge of the negotiations revealed that Tata expressed an interest in acquiring a majority stake exceeding 51%. However, Tata has communicated to Haldiram’s that the proposed valuation is considerably steep.

The potential acquisition represents an exciting opportunity for Tata, the person said, adding, “Tata (Consumer) is seen as a tea company. Haldiram’s is huge in the consumer space and has a wide market share.”

The insiders shared this information under the condition of anonymity.

A representative from Tata Consumer Products stated that they “do not provide comments on market speculations.” Haldiram’s Chief Executive Krishan Kumar Chutani and Bain declined to offer any comments.

Haldiram’s, a family-operated enterprise, can trace its roots to a modest shop established in 1937. It has gained renown for its crispy “bhujia” snack, which is available for as low as 10 rupees and can be found in local mom-and-pop stores.

According to Euromonitor International, it holds approximately 13% of India’s $6.2 billion savory snack market, a share comparable to Pepsi, renowned for its Lay’s chips.

Haldiram’s snacks are additionally available in international markets such as Singapore and the United States. The company operates approximately 150 restaurants that offer a diverse range of local cuisine, sweets, and Western dishes.

One biscuit less, one lakh more: ITC Limited pays hefty price for packaging error

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September 6, 2023

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The adage “A small mistake can snowball into a major blunder” became a harsh reality for ITC Limited when they were forced to compensate a customer with INR 1 lakh due to a packaging error in a Sunfeast Marie Light biscuit packet. This incident took place approximately two years ago when P. Dillibabu, residing in MMDA Mathur, Chennai, purchased two biscuit packets in December 2021 from a Manali retail store. His intention was to use them to feed stray animals. To his disappointment, he found that one of the packets contained only fifteen biscuits instead of the advertised sixteen, as reported by the Times of India.

Dillibabu made efforts to seek clarification from both his neighborhood store and ITC but was left dissatisfied with their responses. Growing increasingly frustrated, he decided to file a formal complaint with a consumer court. In his complaint, he emphasized that each biscuit was priced at 75 paise. Upon his calculations, he pointed out that with the company producing nearly 50 lakh packets per day, ITC could potentially be causing a daily public loss of INR 29 lakh due to the discrepancy.

In its defense before the court, the FMCG giant contended that the product’s sale was based on its weight rather than the quantity of biscuits contained within. They asserted that the product was advertised with a net weight of 76 grams. However, upon inspection, the commission determined that it actually weighed only 74 grams. ITC’s legal representatives cited the Legal Metrology Rules of 2011, which permit a maximum allowable error of 4.5 grams for pre-packaged commodities. Nevertheless, the judge disagreed, clarifying that this rule was applicable solely to items categorized as ‘volatile’ in nature.

As a result, on August 29th, the court determined that ITC had participated in ‘unfair trade practices’ and directed the immediate cessation of the sale of the particular batch of biscuits in question. Additionally, the judge decreed that the company must provide the consumer with compensation totaling INR 1 lakh. This conclusion marked the end of a case in which what appeared to be a minor mistake ultimately incurred a substantial cost for the company, all stemming from a single biscuit!

Perfora breaks new ground in oral wellness with Purple Teeth Whitening Serum

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September 6, 2023

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Perfora's Purple Magic Teeth Whitening Serum

In a world where the impact of a smile is profound, Perfora, India’s pioneering brand in digital-first oral wellness, has illuminated the path to brighter smiles through its groundbreaking innovation: the Purple Teeth Whitening Serum.

Inspired by the captivating harmony of colors, Perfora introduces a revolutionary concept that revolves around the dynamic interplay of two complementary hues: purple and yellow. The underlying science is elegantly straightforward: by applying the purple solution to your teeth, it adeptly counteracts and neutralizes the yellow stains on the enamel, revealing a noticeably brighter and more radiant smile.

Perfora’s Purple Magic Teeth Whitening Serum, presented as a gel-like solution, has been meticulously designed for sustained and regular application, effectively fading those stubborn yellow teeth stains over time. This groundbreaking formula combines the mesmerizing properties of purple with the teeth-brightening power of bromelain and papain enzymes, derived from pineapples and papayas, respectively.

This product goes beyond simple teeth whitening; it represents a smile transformation that exudes confidence. It seamlessly aligns with Perfora’s unwavering dedication to reshaping the landscape of oral beauty, establishing itself as the top choice for innovative oral care, with a special focus on catering to the preferences of Gen Z and millennials.

The Purple Teeth Whitening Serum comes in a user-friendly airless pump bottle, seamlessly fitting into your daily routine with ease. With a budget-friendly price of only INR 499 for a 30ml bottle, it serves as an economical and readily available option for individuals looking to attain a brilliant smile.

SUN Mobility teams up with Swiggy to electrify 15,000+ delivery e-bikes

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September 6, 2023

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Sun Mobility, a company specializing in energy infrastructure and services for electric vehicles (EVs), is set to join forces with Swiggy, the on-demand convenience delivery platform, with a goal to electrify over 15,000 e-bikes within their delivery fleet over the next year.

In this collaborative effort, Swiggy’s final-mile delivery e-bike fleet will gain access to SUN Mobility’s cutting-edge battery-swapping technology and an extensive network of battery-swapping stations, as indicated in an official company statement.

“We are happy to partner with the company to drive the adoption of electric mobility in India,” said Anant Badjatya, CEO, SUN Mobility.

Swiggy’s fleet delivers millions of orders each month, with delivery executives travelling an average of 80–100 kilometres daily. Mihir Shah, Head of Operations at Swiggy, added, “We look for ways to increase the adoption of electric vehicles in our delivery fleet. Working with SUN Mobility allows us to solve concerns about access to battery-swapping stations. Our delivery partners can keep going without putting in extra miles or delays due to battery swapping, all while giving them savings on fuel and vehicle maintenance and contributing to a greener environment.”

General Mills to double manufacturing capacity in India with new Nashik plant

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September 6, 2023

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General Mills India, a subsidiary of the American Fortune 500 packaged food conglomerate General Mills, celebrates a momentous occasion as it conducts a groundbreaking ceremony for its upcoming manufacturing facility in Nashik, Maharashtra. This marks a significant step in General Mills’ growth and commitment to the Indian market. The new plant will play a pivotal role in producing Pillsbury Baking Mixes specifically tailored for the Indian consumer and is projected to commence operations by August 2024.

General Mills’ forthcoming plant will become their second manufacturing hub for Pillsbury Baking Mixes within India. The company is committed to investing approximately INR 100 crore in constructing this facility, which will boast cutting-edge technology and modern infrastructure. This strategic move will effectively double General Mills India’s manufacturing capacity, ensuring their ability to keep up with the rising demand for Pillsbury bakery solutions in the Indian market. The Pillsbury brand has already established a formidable presence in the Baking Mixes sector and is poised to continue serving the expanding bakery and food service industry in India.

“The bakery industry in India is witnessing remarkable growth,” said Anand Khurana, country director for General Mills India. “Beyond birthdays, cake cutting has become integral to various occasions like anniversaries, success parties and festive gatherings. Pillsbury’s bakery solutions empower bakers with consistent quality in every cake batch and enhance efficiency in the back-of-house operations of bakery businesses. The new facility will mark Pillsbury’s commitment to serving more bakers in India and supporting their business growth.”

Pillsbury made its debut in the Indian market with Baking Mixes in 1999. Since that time, it has risen to a dominant position as the go-to choice for professional bakers in the Cake and Dessert Mixes category. The forthcoming facility in Nashik is primed to solidify Pillsbury’s reputation as the preferred brand among bakers all across the country, catering to their ever-changing requirements and demands.

India plays a central role in General Mills’ worldwide expansion strategy. The choice to expand production capacity by establishing the new facility serves as a clear demonstration of General Mills’ unwavering dedication to fostering the growth and prosperity of the baking industry.

‘’India is among General Mills’ priority markets worldwide,’ ’said Balki Radhakrishnan, vice president and managing director of Global Emerging Markets at General Mills. “In recent years, our business in India has consistently accelerated growth and the new manufacturing plant reinforces our dedication to growing in India by delighting more consumers and catering to evolving consumer needs.’’

“The growth and success in India of an iconic American brand such as General Mills shows the strength of U.S.-India economic ties and the potential of our nations to work together to serve global markets,” said Greg Pardo, spokesperson for the U.S. Consulate General Mumbai. “General Mills’ expansion here in Nashik reflects their commitment to advancing the agricultural industry of Maharashtra by creating wonderful foods for the world to enjoy.”

Reliance Retail Ventures injects INR 300 Crore in equity into RCPL for FMCG expansion

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September 6, 2023

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Reliance Retail Ventures is injecting INR 300 crore in equity into its recently established fast-moving consumer goods business, known as Reliance Consumer Products (RCPL). This investment is being made through optionally fully convertible debentures (OFCD), with INR 277 crore having already been infused into the company, as indicated by RCPL’s latest fiscal year financial report. Notably, this marks the initial significant capital injection from the company’s promoters into the venture.

Reliance Retail Ventures serves as the parent company overseeing all retail operations within the Reliance Industries conglomerate. The allotments took place on February 1 and March 31.

“During the period, the company (RCPL) obtained approval from its shareholders to offer, issue and allot up to 300,000,000 unsecured zero coupon OFCDs of face value of INR 10 each to its existing holders of equity share on right basis,” said the filing by RCPL.

RCPL has an authorized share capital of INR 1 crore, with an issued, subscribed, and fully paid-up capital of INR 1 lakh. The company commenced its operations on November 30, 2022.

The report additionally revealed that RCPL invested INR 200 crore to acquire a 50% stake in Gujarat’s Sosyo Hajoori Beverages. This joint venture aims to bolster RCPL’s footprint in the beverage sector, following its acquisition of the Campa brand.

As of the time of press, an email directed to RCPL had not received a response.

According to an industry executive, Reliance Retail Ventures intends to inject additional funding into RCPL during this fiscal year as part of its plan to expand the FMCG business on a national scale.

“The company has aggressive plans to enter each and every category since FMCG is its latest bet,” said the executive, who did not wish to be identified. Reliance Retail Ventures director Isha Ambani recently said the FMCG business made a strong start by entering several categories through multiple brands and strategic partnerships.

FarMart joins ONDC as the first food and agri-tech supply network

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September 6, 2023

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FarMart, India’s fastest-growing intelligent food supply network, has taken a groundbreaking step by becoming the first food and agri-tech company to join ONDC. This strategic move empowers FarMart to facilitate easy access to high-quality ingredients for food manufacturing businesses across India through the ONDC network.

Through this collaboration, FarMart and ONDC are collectively reshaping the food supply chain landscape. Their efforts are aimed at seamlessly linking food value chains throughout the country and fostering effortless connections between food producers and manufacturers.

The food and agri-tech company recently completed a substantial business-to-business (B2B) bulk order, supplying 5,000 kilograms of flour through their network. FarMart presently offers a diverse range of over 25 Stock Keeping Units (SKUs) consisting of processed products, including various food grains, oilseeds, spices, and pulses, catering to the needs of food businesses.

Through this partnership, food businesses nationwide will gain access to FarMart’s extensive network, comprising over 200,000 village-level aggregators and over 2,000 processors.

Speaking on the occasion Alekh Sanghera, Co-Founder & CEO of FarMart, said, “FarMart mission is to make food value chains more resilient, reliable & rewarding for humanity. Being live on ONDC is a pivotal element of our distribution strategy as it enables us to seamlessly connect farming communities with food processors and eventually end consumers while ensuring traceability.”

“Being a board member at both FarMart and ONDC, this news gives me immense joy and pride. This collaboration provides improved access for farmers, small businesses, and consumers in the food supply chain which is the shared mission of both organizations.

This is a big step towards digitization, traceability and efficiency of global food supply chains.”, said Anjali Bansal, Founder and Managing Partner at Avaana Capital.

“I am happy to see FarMart joining the network, looking forward to more Agri-tech companies, agriculture commodity buyers to join network to enable e-procurement of Agriculture Commodities,” T Koshy, MD & CEO of ONDC said in an official statement.

FarMart serves as a smart food supply network, linking farming communities with global food businesses. They develop digital products and commerce solutions that revamp food value chains, with a mission to enhance the resilience, reliability, and profitability of these chains for humanity. Notably, in 2022, FarMart achieved recognition from Deloitte, securing the top spot as the fastest-growing technology company in India.

Prominent venture capital firms such as General Catalyst, Matrix Partners, Omidyar Network, and Avaana Capital have joined forces with and provided support to FarMart. They are dedicated to investing in innovative technology companies that prioritize sustainability and purpose.

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