Food e-tailer Faaso's plans to raise up to Rs 498 cr at valuation of Rs 2,400 cr

Pune-based online food services company Faaso's Food Services Pvt Ltd is planning its next round of fund-raising.

Faaso's recently secured $20 million (Rs 120 crore) from Lightbox Ventures, and plans to raise $50 million to $80 million (Rs 311 crore to Rs 498 crore) at a valuation of $350 million to $400 million (Rs 2,100 crore to Rs 2,400 crore), according to sources in the know of the developments.

A number of global investors have shown interest in the company, and discussions are at preliminary stages. Faaso's diluted 20 per cent to 22 per cent stake in the recent fund-raising at a valuation of $80-85 million.

Jaydeep Barman, co-founder and chief executive, Faaso's, said, "A few large investors have shown interest. But nothing has been finalised." He refused to disclose details on stake dilution. Faaso's has an annual revenue of Rs 80 crore to Rs 85 crore.

Established in 2011 by Barman and Kallol Banerjee in Pune, Faaso's raised Series-A funding from Sequoia Capital in 2012. It delivers wraps and rice items in Mumbai, Pune, Ahmedabad, Bengaluru, Baroda, and Chennai. Faaso's has 100 delivery centres and will expand to 200 in 12 cities, including Gurgaon, Delhi, Indore and Hyderabad, by the end of 2015-16.

"The store-based roll-out model is challenging due to high rents, capital intensity, and difficulty in opening stores. Mobile food companies like Faaso's and TonyOwl are highly scalable," said G V Ravishankar, managing director at Sequoia.

Faaso's competes with online portals such as TinyOwl and Foodpanda. In February, Mumbai-based food ordering app TinyOwl raised Rs 100 crore in its Series-B round from Matrix Partners, Sequoia Capital, and Nexus Venture Partners. In December, TinyOwl had raised $3 million from Sequoia and Nexus VP. Global online food ordering platform Foodpanda has raised $110 million from Rocket Internet and other investors.

"At a time when the home delivery of food is picking up, and people travel to various cities often, the app-based food delivery business will pick up fast," said Pushpinder Singh, co-founder and chief executive, TravelKhana, an online food delivery service for railway travellers. TravelKhana, which has raised angel funding from Google India's managing director Rajan Anandan and Palaash Ventures, is in discussions to raise Series A funding of $5-10 million from investors to expand into 180 cities from 50 cities at present.