Kalaari Capital has picked up a significant minority stake in Ubiquitous Foods Pvt Ltd, which operates the Ovenfresh bakery and coffee chain. The venture capital firm (formerly Indo-US Venture Partners) invested in the Chennai-based company last month, according to a source familiar with the development.
While VCCircle could not immediately ascertain the investment amount, Kalaari typically invests up to $5 million in Series A funding.
Rajesh Raju, managing director at Kalaari, confirmed the development. Raju has also joined the board of Ubiquitous Foods as part of the deal.
Ovenfresh currently operates 10 outlets in Chennai, which are primarily located in corporate IT parks. The firm is focusing on the office and institutional segment although it may open a few independent outlets, Raju told VCCircle.
The company is now looking to expand to Bangalore and is in the process of signing up with a few corporate houses.
Ovenfresh was set up in 2008 by Rajiv Subramanian, an IIM-Ahmedabad alumnus and former investment banker who worked with Lehman Brothers.
The investment is part of Kalaari’s strategy of betting big on the Indian consumer sector, said Raju. Although it is the VC firm’s first investment in the food & beverage space, Kalaari has invested in the consumer retail space before.
One of its major wins came when Kalaari, along with Peepul Capital, exited Hyderabad-based pharmacy chain MedPlus Health Services at 3x-4x returns in 2011. Raju, who was working with Peepul Capital at that time, was the first to spot the company. Later, he brought the then Indo-US Venture Partners for the second round of funding. He left Peepul to join Kalaari Capital in 2011.
Recently, Kalaari made another investment in the consumer retail space when it put in $5 million in Hyderabad-based auto repair services provider CarZ in 2011.
Private equity and venture capital investors have shown considerable interest in the Indian restaurant space, with a few like Everstone Capital and New Silk Route setting up platform play for the sector. The segment saw 9 deals worth $159 million in 2011, compared to 12 deals worth $122 million in 2012, according to VCCEdge.
In 2013, there has been only been one deal so far with CX Partners buying stake in Barbeque Nation Hospitality Ltd for Rs 110 crore ($20 million).
(Edited by Sanghamitra Mandal)