FreshMenu, an online food-tech venture that delivers meals prepared at its kitchen facilities, has raised $17 million (around Rs 110 crore) in Series B funding led by Zodius Technology Fund.
FreshMenu’s existing investor Lightspeed Venture Partners also put money in this round, Signal Hill India, the investment banker to the transaction, said in a statement.
It had raised $5 million in Series A round of funding last year from Lightspeed Venture Partners.
Food Vista India Pvt. Ltd, which runs FreshMenu, will use the funds to expand operations across the top six cities in India, and further its investments in brand building, tech and people.
Bangalore-based FreshMenu was founded in 2014 by IIM Ahmedabad alumni Rashmi Daga, who has previously worked with cab aggregator Ola and online jewellery store Bluestone.
FreshMenu is a full-stack food business wherein it controls the kitchens and delivery services. Started in Bangalore, the company has now expanded its services to Mumbai and Delhi-NCR. It offers a dynamic menu including mains, sides, salads and desserts. Other companies offering full-stack food services include Brekkie, Faaso’s and Box8.
FreshMenu’s successful fund raising round comes as a much-needed breather for the food-tech industry which has been on a downward spiral since the second half of 2015 as many companies struggled to raise funds, particularly mid- and late-stage investment.
This fresh food-tech investment comes on the heels of another player, Bundl Technologies Pvt Ltd, which runs online food ordering startup Swiggy, raising $35 million in Series C round of funding led by New York-based investor Harmony Partners and Singapore-based RB Investments.
However, several food-tech startups are still reeling under financial pressure to control costs and sustain investor interest; some have shut shop, tweaked their businesses, paused operations or reduced their staff count.
In December, Bangalore-based Eatlo Tech Solutions Pvt Ltd, which runs food delivery startup Eatlo, closed its operations five months after it raised angel funding from Powai Lake Ventures, Abhishek Goyal of Tracxn Labs and equity crowdfunding platform Globevestor. Also, mobile-only food ordering startup TapCibo Online Solutions Pvt Ltd, which operated under the brand Dazo, recently decided to shut shop as the Bangalore-based company completed a year of operations.
In September, food ordering marketplace Foodpanda was accused of irregularities in its operations involving fake orders.
The online food ordering business in India is estimated at Rs 5,000-6,000 crore, growing about 30 per cent month-on-month, according to a report by India Brand Equity Foundation. The sector includes aggregators, food-ordering platforms, delivery-only players, proprietary meal sellers and cloud kitchens.