iD Fresh Food raises $25M from Premji Invest, aims for Rs 250cr revenue in the coming year
Ready-to-cook fresh packaged food company iD Fresh Food has raised a fresh round of funding of $25 million for 25 percent stake from Premji Invest, Azim Premji's investment arm. A press statement by the company has stated that the investment was taken against a significant minority stake. The company had previously raised Rs 35 crore from Helion Venture Partners in October 2014.
Musthafa PC, CEO and Co-founder, iD Fresh Food, says that with this round of funding, the team is looking to set up five large manufacturing facilities in India (Bengaluru, Mumbai, Delhi, and Kolkata) and the Middle East (Ajman).
Founded in 2006 by IIM Bangalore alumnus PC Musthafa and his associates Shamsudeen TK, Abdul Nazer, Jafar TK, and Noushad TA, iD has production units in six cities, including two plants in Bengaluru and one each in Chennai, Mumbai, Hyderabad, Mangalore, and Dubai.
iD products are also supplied to distribution centres in Cochin, Coimbatore, Vijayawada, Guntur, Rajahmundry, Visakhapatnam, Mysore, Mangalore, and Pune, in addition to the above-mentioned cities. With a current team size of 1,000, iD is set to expand to 30 cities in the next five years and is already present in over 21,000 stores.
The company claims to have made a revenue of Rs 150 crore this year and is looking at closing a revenue of Rs 250 crore next year. In the next five years, iD is targeting a revenue of Rs 1,000 crore. Musthafa says,
“The five new manufacturing facilities that we are looking to set up will increase the current capacity by at least seven tonnes. Also, since we are focused on fresh and 100 percent natural products without any chemicals, our new line of products will follow in the same vein. Also, in the next two to three months, we will be launching our vada batter.”
From idli to dosa batter, the product line has diversified to include parotas, chutneys, and other ready-to-cook meals. The products are present in retail outlets across 14 cities including a presence in the UAE.
“iD’s philosophy is to enable the homemaker and not to replace her. As a result, all iD products are preservative-free and traditional Indian foods made the natural way, just like ‘made-at-home’. iD will use the funds to build category awareness, accelerate geographic expansion, capacity expansion with state-of-the art plants, and augment the team,” adds Musthafa.
Speaking of why they chose to invest in iD, Rahul Garg, Partner, Premji Invest, says they were impressed by the spirit demonstrated by Musthafa and the senior management team. They also believe that there is a large market opportunity in producing fresh foods for the Indian consumer. Rahul believes it to be a billion-dollar opportunity with iD Fresh as the market leader.
Mithun Appaiah, VP, Sales and Marketing, iD, adds that they are leading in the category creation of the Rs 5,000 crore idli and dosa batter market, and even in the Rs 1,000 crore parota market. He adds that, currently, the branded players have only one and six percent of the market respectively.
He, therefore, believes that there exists a huge headroom for growth through awareness building. iD’s unique positioning of being fresh and 100 percent natural resonates well with the consumer.
“Unique business models and great teams have consistently attracted best-in-class investors at good valuations. We continue to see strong investor interest in the food and beverages space and the overall consumer sector in general,” says Chinmaya Sreekaran, Lead – Consumer Sector, MAPE Advisory Group, who advised iD Fresh Food on this transaction.
Apart from selling in physical retail outlets, iD Fresh Food has also partnered with the likes of BigBasket and Grofers.