iD Fresh Food closes Rs 507 crore in Series D round of funding

iD Fresh Food, India’s fastest-growing and innovative, fresh food start-ups, announced the closing of its Rs 507 crore Series D round of funding. In one of the largest deals in the food start-up space, the round was led by NewQuest Capital Partners, Asia’s leading secondary private equity firm, along with the existing investor, Premji Invest. iD’s constant endeavor to create a fresh and healthy revolution in the fresh food space and its iconic and consumer-friendly innovations have made the company one of the most popular brands in the country and overseas.

Testimony to iD’s incredible growth story is Helion Ventures’ exit with a multi-bagger 10X return. Kotak Mahindra Capital acted as the exclusive financial advisor to the company and Helion. The strategic fundraise reflects the brand’s ambition to strengthen its market leadership in the fresh foods business, foster product innovation, build capacities and expand its presence across key markets in India, the UAE, and the US. As part of its global expansion plans, the company plans to extend its presence to Singapore, Malaysia and other markets in the near future.

Founded by PC Musthafa, Abdul Naser and his brothers in 2005, iD had secured US$5.2 million in Series A funding from Helion Ventures in 2014 and US$25 million from Premji Invest in 2017. From humble beginnings, iD has become one of India’s most loved food brands and has been recognized for its innovative yet simple solutions to problems faced by people in the kitchen.

The company has witnessed unprecedented growth across all its categories and channels – and is on track to achieve Rs 500 crores in revenue (run-rate) for the current fiscal year, despite the pandemic and related challenges in the last two years. Last year, the company launched the world’s largest idli-dosa factory at Anekal in Karnataka with capex investment of close to INR 50 crore. Its fully automated Giant Kitchen produces over one lakh kg batter and three lakh parotas per day.

Commenting on the fundraise, PC Musthafa, co-founder and CEO, iD Fresh Food said, “iD is a people’s brand, driven by high ethical standards. Values are vital to our growth. I’m grateful to our loyal customers for their constant love and support. iD is what it is today because of them and the strong commitment of our team to find solutions to common, everyday problems. The fundraiser is yet another milestone in our journey, but the ride has just begun. In the coming years, we will expand our presence across channels and geographies, strengthen our supply chain practices and introduce innovative products that will redefine the packaged fresh food space not just in India, but across the globe.”

“I’m pleased to have NewQuest Partners as our new investor on board and thank Premji Invest for continuing to support iD in its journey. I believe that their confidence in us is testimony to iD’s continued growth and commitment towards building a sustainable and healthy future for all. I also thank the team at Helion for their constant support all these years and for believing in us during tough times,” added PC.

“While there is a large opportunity set in the fresh food space, iD has a clear edge as a market leader with its deep understanding of consumer preferences and ability to innovate real-time and define industry benchmarks. Its undisputable leadership position is a testament to the quality of the founding team and the innovative and people-oriented business they have created. We’re excited to be a part of their journey and a part of the consumer revolution that they’re driving,” said Amit Gupta, Partner and Head of India and Southeast Asia, NewQuest Capital Partners.

“At a time when businesses across the globe are trying to navigate the economic recovery, iD is among the few companies that has stayed true to its purpose – despite all odds. Over the years, iD has been consistently delivering strong revenue retention metrics against a robust corporate governance model. Our solid growth fundamentals and market dominance in flagship categories make iD an undisputed leader. We’re well poised for an aggressive growth phase with plans to launch an IPO in the next few years, creating a billion-dollar enterprise and solidifying our longstanding leadership position in the fresh food category. We’re confident that we will continue to grow and provide immense value to our patrons and investors,” said Jaipal Singal, Chief Financial Officer, iD Fresh Food.

To unlock the billion-dollar opportunity in the direct-to-consumer (“D2C”) space, iD has been pivoting and transforming its distribution model and investing heavily in fostering its online presence. “iD’s sales from eCommerce have grown by 300%, reflecting the massive growth opportunity that D2C promises. To provide consumers with broader access to iD’s products, iD has also partnered with BigBasket to launch a co-branded label, iD Fresho. The company intends to reach a million households in India with its D2C business and leverage its superior unit economics compared to all fresh food companies, including those in the D2C space. It is well-positioned to continue building on all its channels and platforms in creating a seamless and delightful experience for its customers globally,” said Rahul Garg, Partner, Premji Invest.

Talking about Helion’s exit, Rajiv Kataria said, “We identified the potential of iD early on. We were very impressed with the team at ID. We’re glad to create substantial value in our association with them. We wish them luck and are sure that they will continue to delight their customers with innovative products.”

Since its inception in 2005, iD has used common sense to be at the forefront of innovation to revolutionize the way customers consume fresh food at home. Currently, iD caters to over 45 cites, across 30,000 retail stores in India, UAE and US. The Bengaluru-based brand’s extensive natural and healthy product range includes Idly and Dosa Batter, Ragi Idly and Dosa Batter, Rice Rava Idly Batter, Malabar Parota, Wheat Parota, Wheat Chapati, Soft & Creamy Paneer, Creamy Thick Curd, ‘Squeeze and Fry’ Vada Batter, Instant Filter Coffee Liquid, Sandwich White Bread and Wheat Sliced Bread. Currently, the company has manufacturing plants in Bengaluru, Hyderabad, Mumbai and UAE. iD’s manufacturing plant in the US is in the pipeline.