The Bengaluru-based brand is eyeing a healthy chunk of the Rs 40,000-crore dried fruits and nuts market, estimated to be the largest in the world.
“The capital raised will be used for capital expenditure, for automation and to expand marketing and distribution capabilities,” said Vikas Nahar, founder director at Happlio. “We are well capitalised for another 12-18 months, post which we might again hit the market for capital raising.”
This investment is in continuation of the growth that D2C (direct-to-consumer) brands, which have carved a niche for themselves in the crowded Indian market, are seeing in the last few years. This has led to venture capital investors making a beeline to invest in such startups. Healthy snacking as a category has seen tremendous growth, with the pandemic giving the sector a shot in the arm as an increasing number of people take to healthy eating habits.
Founded in 2016 by Vikas Nahar, Happilo competes with Nutty Gritties, Cornitos and Rostaa in the nuts and dry fruits segment.
The bootstrapped company that sells directly to consumers has a revenue run rate of Rs 180 crore, and is profitable. This is the first institutional capital raised by the company. Typically, online contributes to around 60% of the business and rest is from modern and general trade, Nahar said. “The company has grown almost three times in the Covid-19 period,” he added.
A91 Partners was founded by former managing directors of Sequoia Capital, Abhay Pandey, VT Bharadwaj and Gautam Mago. It has backed half a dozen companies since inception in 2018. Some of its portfolio companies include Sugar Cosmetics, Paperboat, Atomberg, Aye, Digit and Pushp. It is expected to launch its second India-focused fund this year.
“Happilo’s progress without any external capital is very impressive. Now they have a unique opportunity to leverage their Omni-channel capabilities to lead a large and important category in India towards getting organised,” said Abhay Pandey of A91 Partners.
In the last few years, companies such as Slurrp Farm, Open Secret, Yoga Bar, SnackAmor and Keeros Foods have raised capital in the last 12-18 months from investors to grow the business. D2C brands across fashion, beauty and personal care, food and beverages and electronics are expected to rack up $100 billion in business by 2025 in the country, according to a recent report by Avendus Capital.