Creador, NewQuest, TR Capital bet on KFC operator Sapphire Foods
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Sapphire Foods India Pvt Ltd, one of the largest franchisees for Yum! Brands’ KFC, Pizza Hut and Taco Bell restaurants in the Indian subcontinent, has raised Rs 1,150 crore ($154 million) in funding from a consortium led by Malaysia based private equity firm Creador. 

Hong Kong based secondaries private equity firms NewQuest Capital Partners and TR Capital also participated in this round, as per a press statement. Avendus Capital acted as the exclusive financial advisor to Sapphire Foods on the transaction.

VCCircle was the first to report that Creador and others have invested in the company. 

“The quick service restaurant chain segment, largely represented by global brands, is the fastest growing segment within the organised food services market in India,” said Kabir Thakur, managing director at Creador. 

VCCircle had also reported that these investors would provide partial exits to Samara Capital, CX Partners, Goldman Sachs and Edelweiss Private Equity. 

“This investment round is to fund new store expansion and for providing partial exits for a few investors,” said Sumeet Narang, founder of Samara Capital. 

Sapphire Foods says it operated 437 restaurants of KFC, Pizza Hut and Taco Bell in India, Sri Lanka, and the Maldives as on 31 March 2021. 

The quick service restaurant space in India is dominated by multinational chains McDonald’s, KFC, Burger King India Ltd and Subway.     

Burger King India Ltd, controlled by private equity firm Everstone Capital, had gone for an initial public offering (IPO) last December. In March this year, casual dining chain Barbeque Nation launched its IPO.   

New investors

Creador has a long history of investing in India. Its local portfolio includes Ahmedabad-based drugmaker Corona Remedies Pvt Ltd, plastic products maker Vectus Industries Ltd, financial services company Ujjivan, plastic packaging solution provider Shriji Polymers, non-bank lender Kogta Financial and IT solutions company iValue.  

NewQuest, launched in 2011 and focused on emerging markets, had last month acquired a minority stake in Kids Clinic India Pvt Ltd which operates the Cloudnine chain of hospitals. 

Other investments in India this year include those in animation firm Cosmos-Maya and the holding entity of fintech firms KreditBee and Krazybee Services. In February this year, private equity firm TPG said it would bump up holding in NewQuest to own a controlling stake in the secondaries private equity firm.   

TR Capital manages four funds with capital commitments of close to $1 billion. Founded in 2007, it has closed 37 secondary investments and built a track record with TR Capital I (2008), TR Capital II (2012), TR Capital III (2016) and TR Capital IV (2019). 

In India, TR Capital holds stakes in eyewear retailer Lenskart Solutions Pvt Ltd and non-bank lender Arohan Financial Services Pvt Ltd. In July 2019, VCCircle reported that TR Capital had invested in Supermarket Grocery Supplies Pvt Ltd which runs Bigbasket.  

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