Pune-headquartered Faasos Food Services Pvt. Ltd, a quick service restaurant chain and online food delivery platform, will receive fresh funding of around Rs 33 crore ($5 million) from existing investors, two people familiar with the development told VCCircle.
The participating investors will include Lightbox Ventures, Sequoia Capital India, RuNet South Asia and RB Investments, said the above-mentioned persons who wished to remain anonymous.
Jaydeep Barman, co-founder of Faasos, told VCCircle in a text message: "This money, deal yet to be concluded, is part of a Series C tranche that was committed a year back when we raised Series C, based on meeting certain milestones. We have met those milestones."
In December 2015, Faasos had raised a Series C round of $30 million from Russian investment firm RuNet. Sequoia Capital had led a $8 million Series A funding round in the firm in 2011.
In February 2015, the firm had raised $20 million in a funding round led by Lightbox Ventures.
Barman said the fresh funds will primarily be used to set up more delivery (cloud) kitchens in the 15 cities where it currently operates. Faasos currently has 150 such kitchens and Barman said the company plans to add another 100 this year.
A former McKinsey and Co executive, Barman had founded Faasos in 2004 with Kallol Banerjee. Both Barman and Kallol are engineers with MBAs from Indian Institute of Management (IIM) Lucknow and France-headquartered business school INSEAD, respectively.
The firm had narrowed its losses to Rs 82 crore in 2016-17 from Rs 111 crore the previous fiscal, show filings with the Registrar of Companies (RoC).
Net sales rose to Rs 82.28 crore in the last financial year, up from Rs 62 crore in 2015-16.
Faasos’ comparable rivals in the food delivery space have also been making losses while increasing sales.
FreshMenu more than doubled its net sales in 2016-17 to Rs 70.9 crore from Rs 31.7 crore in 2015-16. Net loss widened to Rs 42.3 crore from Rs 33.8 crore, as total expenses increased to Rs 117 crore from Rs 67 crore.
Another peer, Mumbai-headquartered Poncho Hospitality Pvt. Ltd which offers an on-demand food delivery service under the brand Box8, reported revenues of Rs 51 crore in 2016-17, a significant increase from Rs 28 crore in the previous fiscal. Losses narrowed to Rs 12.4 crore from Rs 15.1 crore in 2015-16.