Jimmy raises Rs 6 cr funding from Vinay Agarwal, Keki Mistry, others

Radiohead Brands, which makes Jimmy's cocktail mixers, on Tuesday said it has raised Rs 6 crore funding led by First State Stewart Asia Director Vinay Agarwal, HDFC Ltd CEO Keki Mistry and others.

The funds will be deployed towards new product development and retail expansion.

The bridge round also saw participation from existing investors and the founders.

Launched in September 2019, the company had completed a seed round of Rs 2.5 crore last year.

"We launched in September 2019 only in select shops in Delhi NCR, as we wanted to take a time to understand consumer response to our product and packaging. In six months' time when we were all set to launch in retail across multiple cities when COVID-19 pandemic hit the country," Radiohead Brands founder Ankur Bhatia told PTI.

He added that the company brought forward D2C operations with the launch of its website in April 2020, starting with deliveries only in Delhi/NCR.

"It was in August 2020 that we started delivering nationally via online sales and since then we have expanded our retail network to 20 cities...While 50 per cent of our online sales currently come from the top 10 metros, the balance demand is distributed across the rest of the country, from over 300 cities," Bhatia said.

He added that the company - whose cocktail mixers (non-alcoholic) are available on e-commerce platforms and 1,500 retail outlets across 20 cities - is developing its HoReCa (Hospitality Restaurant Catering) strategy and will roll out the plans there, starting with key metros.

The company's product format presents a number of unique institutional opportunities including corporate sales, Bhatia noted.

He said the company intends to add more variants to its current mixers range and other products in new categories "which may fit seamlessly into this occasion, including snacking and RTD (ready to drink) alco bevs".

The company's products are currently manufactured at a third-party facility in Nashik (that is exclusively catering to the company).

"We prefer to remain asset-light and are not looking to invest in our own manufacturing unit for now. However, we manage all critical operational processes like supply chain, QC and R&D in-house. In fact, all our current flavours have been developed in house," he said.

Bhatia pointed out that pre-COVID, the company had a team of three people that have now been scaled to 30 and the new funds will also enable it to hire aggressively across functions to help fuel growth.

"We had pegged mixers as a category in India to have a potential of Rs 2,500 crore, although this was a pre-COVID assumption. Home occasions have actually seen a rise since, and the market size could be much larger now," he said.

Bhatia highlighted that challenges to the business are largely on account of logistics in transporting glass bottles and travel restrictions on account of COVID.

"Costs associated with national glass bottle delivery is possibly the single largest contributor to our losses," he said adding that the company's losses are currently at 10-15 per cent of Jimmy's revenue.While Bhatia did not comment on revenue, he said the company is looking to breakeven by financial year 2023-24.

Asked about international expansion, he said the company is in talks with distribution partners in many countries across the Asia Pacific (APAC) and Europe, Middle East and Africa (EMEA).

"Australia is one of the first among these markets we should be available in, possibly as early as next month...Our current strategy will be available in retail via export... However, as we scale our operations successfully overseas, we would like to set up D2C online sales alongside expanding retail presence," he said.

The retail plus D2C approach has worked well in India, and Jimmy's is hopeful of replicating that model internationally as well.