Meat startup Licious becomes first Indian D2C unicorn with $52 mn fundraise

Licious, India’s largest technology (tech)-first full-stacked direct-to-consumer (D2C) fresh meat and seafood brand, has raised $52 million in a funding round led by IIFL Asset Management’s (AMC's) late-stage tech fund. The funding has made it India’s first such D2C unicorn or a start-up with over $1-billion valuation.

Avendus Future Leaders Fund has also invested in this round. Avendus Capital acted as the exclusive financial advisor to Licious for the transaction.

Licious is now the 29th unicorn to emerge out of India in 2021 amid a funding boom. The funding will help it to compete better with players such as FreshToHome,  Zappfresh, as well as large players, such as BigBasket and Swiggy.

Vivek Gupta and Abhay Hanjura, co-founders of Licious, said that in the years to come, Licious will work towards building a sustainable, responsible business that will reimagine the animal protein category in India through an optimal mix of global influence and products curated for the Indian palate. 

“But most of all, you will see us championing the cause of fresh meats and seafood as we continue to put it in the front row of consumer businesses in India,” chimed in Gupta and Hanjura.

Even though the funding for the D2C sector has grown significantly, fast-moving consumer goods is still not considered the most attractive category. 

“We expect Licious' unicorn status to change that,” said Gupta and Hanjura.

FOOD FOR THOUGHT

• Licious is 29th unicorn to emerge out of India in 2021
• The latest funding would help it compete better with players such as FreshToHome and Zappfresh, as well as large players like BigBasket and Swiggy
• Licious serves over 1 million orders every month
• Fresh meat and seafood is still an underserved and unorganised sector that holds an opportunity of $40 billion

The fresh meats and seafood sector holds a vast opportunity of $40 billion. As category leader, Licious aims at paving the way for the second wave of young start-ups that can join hands in fully harnessing the potential the industry has to offer.

The firm said it will continue to build the category through investments in tech for supply-chain excellence, product innovation, talent, and vendor-partner upgrades.

The D2C market in India is at an inflection point and expected to attain a size of $100 billion by 2025. The pandemic has played a major role in accelerating growth for the sector. Despite this, the sector failed to produce a unicorn until Licious. 

D2C has the obvious advantage of direct consumer connect that helps it identify gaps and position products accordingly. However, it must also go through the rigours of building a robust infrastructure that can sustain growth and enable quick scale-up. This needs a bottom-up approach and discipline from Day 0 - a rare accomplishment Licious was able to unlock.

The company said the achievement of its unicorn status is expected to not only further the journey of the brand, but also unlock the next level of opportunity for the animal protein sector. This will be through an inflow of investment, talent, and the emergence of more start-ups that will help raise the bar in all aspects.

Chetan Naik of IIFL AMC said Licious has disrupted the meat and seafood category, which has largely been unorganised and underserved. He said Licious has demonstrated high levels of customer-centricity and an unparalleled focus on supply chain necessary for a perishable product.

“Licious’ focus on product quality, freshness, and innovation has created a strong brand, making it the undisputed category leader,” said Naik, adding, “Today, Licious is amongst the fastest-growing D2C brands and is one of the few consumer businesses in India with very strong revenue-retention metrics.”

Earlier this year, Licious allocated employee stock ownership plans to over 1,000 employees, including the blue-collar workforce. This was followed by a buyback worth Rs 30 crore in August.

The company also recently announced its pledge to comply with the global environmental, social, and governance standards, setting new benchmarks for sustainability and governance.

Spread across 14 Indian cities, the company experienced unprecedented growth of over 500 per cent last year. Licious has successfully delivered to more than 2 million unique customers to date.

In July, Licious raised $192 million in a Series F funding round, led by Temasek and Multiples, making it the highest-funded company in the fresh animal protein business category. Brunei Investment Agency also participated in the round, along with existing investors, 3one4 Capital, Bertelsmann India Investments, Vertex Growth Fund, and Vertex Ventures Southeast Asia & India.

Licious was founded by Hanjura, a Bangalore University science graduate, along with Gupta, a chartered accountant, after a poor meat-buying experience. After successfully testing its tech and business model, Licious launched its service in 2015. The same year, it received an undisclosed investment from former Infosys executive T V Mohandas Pai, along with Kanwaljit Singh, co-founder of venture capital firm Fireside Ventures. The venture enabled customers to place the order through an application, web, and telephone call.

Licious now serves over 1 million orders every month, with over 90 per cent repeat consumption across markets. It is now a 3,500-member strong team, with employees across different disciplines and functions.

It is present in raw and fresh meat and seafood, marinades, and ready-to-eat categories. Licious said it is set to disrupt every food category. In a highly underserved market, which is estimated at $40 billion today, Licious said it has been able to solve the prevailing customer pain points of quality, hygiene, freshness, and convenience in a sustainable manner. 

Built on the farm-to-fork business model, Licious controls the entire back-end supply chain, powered by stringent cold chain control to maintain the quality and freshness of each product. This starts from the time of procurement, processing, storage to the time it reaches the end-consumer. 

In five years, the firm has witnessed 300 per cent growth and has served over 3 million packs of world-class meat products to consumers across Bengaluru, Hyderabad, National Capital Region, Chandigarh, Mumbai, Pune, Chennai, Jaipur, Coimbatore, Kochi, Puducherry, Vizag, Vijayawada, and Kolkata.