Image credit: FreshToHome

FreshToHome banks $121m in India’s ‘largest ever Series C funding for consumer tech’

October 28, 2020

Indian e-grocer FreshToHome has raised $121 million in a Series C round led by UAE sovereign fund, the Investment Corporation of Dubai. The startup said the deal is the biggest fundraise at this stage for an Indian consumer tech company to date.

Also participating in the round were Bahraini alternative asset firm Investcorp, the US government’s Development Finance Corporation, India’s Ascent Capital, and Mumbai-based agrifood commodities trader the Allana Group, among other investors.

Existing investor Iron Pillar, which led the startup’s $20 million Series B raise in August 2019, returned for this round with a $19 million check.

FreshToHome claims to be “the world’s largest fully integrated online brand in fresh fish and meat e-commerce.” It says it clocks close to 1.5 million consumer orders per month and $85 million in annualized sales, and claims it has already hit “EBITDA profitability in mature cities.”

Co-founder and CEO Shan Kadavil said in a statement that the Bengaluru-based startup will use the Series C funding to expand its presence in India and the UAE, where it launched last October after running a pilot in 2017. This will put it on course to achieve its target of $200 million in annual sales for next year.


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According to Kadavil, Covid-19 has “transformed the fish and meat purchasing behavior of consumers dramatically,” leading to increased interest in FreshToHome from shoppers and investors alike.

“Due to safety concerns, consumers made the habit-forming shift to e-commerce and we saw online demand for our products going up [many orders of magnitude] this year thanks to [our] safety guarantee of ‘100% fresh and 0% chemicals,'” he said.

FreshToHome also “creates enormous social and economic impact by enabling sellers to directly source from fishermen and farmers with its […] AI-powered supply chain technology and aided by a state-of-the-art cold chain,” he added.

Investors seeking specialization

According to AgFunder‘s India 2020 AgriFood Startup Investment Report, deals falling under AgFunder’s eGrocery category accounted for 11% of total VC funding in the agrifood space in FY 2020 (the financial year running April 2019 to March 2020) – making its the fifth-highest funded category.

This was down 71% year-on-year, with the category’s two dominant players — BigBasket and Grofers — having raised plus-size rounds in FY 2019.

However, in spite of capital concentration with the horizontal, inventory-led duo, investors decided to instead place early bets on differentiated business models, such as FreshToHome with its focus on fresh, ‘safety-guaranteed’ produce and  hyperlocal Dunzo.

FreshToHome raised $31 million during FY 2020 in two successive two rounds, including its Iron Pillar-led Series B; while Dunzo netted close to $70 million across the eGrocery category’s two biggest deals of the year.

Also among the year’s top eGrocery fundings was the $11 million raised by subscription-based, next-day delivery platform for ‘daily essentials’ MilkBasket. A similar subscription service, DailyNinja, was acquired by BigBasket in a deal thought to be worth up to $20 million.

Pandemic pump

As alluded to by Kadavil, the Covid-19 pandemic does appear to be driving renewed investor interest in India’s e-grocery space – albeit with the slight change in focus towards differentiated models.

Dunzo reported a tripling in demand for food products, beverages, and perishable goods during April this year – at the height of India’s nationwide, government-mandated Covid-19 lockdown.

Citing data from its internal brand intelligence team, BigBasket revealed it experienced an 84% increase in new customers between March and August. Retention of these new customers was 50% higher compared to pre-pandemic levels, according to the company.

Visits to its website and app were up 55% during the same period, while the number of households it served rose 44%. BBdaily — its own take on the ‘daily essentials’ next-day delivery service — experienced growth of 139%.

The pandemic pickup for food e-commerce has not been restricted to India. AgFunder’s recently released Agrifoodtech 2020 Mid-Year Investment Review marked eGrocery as the top-funded category globally between January and June this year, raising $1.8 billion across 76 deals and accounting for 20% of all agrifood venture funding.


Got a news tip? Email me at jack@agfunder.com

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