Vision Fund may lead $100-million funding round in Faasos' parent

Apart from SoftBank, Goldman Sachs, Tencent and Temasek are also expected to participate in funding Rebel Foods

SoftBank’s Vision Fund is said to be in advance stages of talks to invest in foodtech firm Rebel Foods, known for brands like Faasos and Behrouz Biryani.

According to several sources, SoftBank is likely to lead a $75-100 million funding round that the Mumbai-based start-up is planning to close soon. Goldman Sachs, Chinese internet giant Tencent as well as Temasek are also expected to participate in the round, said a person privy to this development.

Existing investors including Sequoia, Lightbox, Evolvence India and Sistema Asia Fund are also expected to participate in the round.

“There are a lot of foreign investors including the American and Chinese firms which have shown a lot of interest,” sources said. “Faasos (Rebel Foods) has gone over the hump where they are a proper growth opportunity.”

A spokesperson of SoftBank could not be reached for comments. Rebel Foods declined to comment on the funding round.

Founded by Insead alumni Jaydeep Barman and Kallol Banerjee, Rebel Foods has raised $119.5 million in funding over nine rounds, according to data platform Crunchbase. It recently raised Rs 110 crore from as part of its Series D1 round, according to the regulatory documents filed by the firm.

Despite the huge cash burn that the sector is witnessing, foodtech companies continue to garner huge investors’ interest. This could be due to the untapped potential the sector offers. According to RedSeer Consulting, the online food ordering and delivery market in India is expected to grow at a compounded annual growth rate of more than 45 per cent to reach $11 billion in gross merchandise value (GMV) by 2023. Several global venture capitalist and private equity firms have either invested in this space or are scouting for opportunities.

Investors such as SoftBank, Sequoia and Temasek have already backed San Francisco-based DoorDash, which provides on-demand food delivery services. It has raised $1.4 billion over eight rounds. DoorDash was last valued at $7.1 billion when it announced in February it had received $400 million. Rebel Foods aims to use the funds to expand in international markets including in Australia, West Asia, and Southeast Asia. It also plans to invest heavily in technology such as automation.

Many of the processes at Rebel Foods' kitchens are already automated. It is building robots that can prepare food items in minutes. Also, using machine learning, its kitchens are able to forecast the number of orders they can expect to get at any given time and location. “We really think that Rebel has got a fantastic leadership team. We are spending a lot of energies to improve the quality of cuisines. Our cloud kitchen model is really kicking in,” said one of the investors in Rebel Foods.

A cloud kitchen is one that does not offer dine-in facility and only accepts orders online. The firm operates about 1,100 online restaurants and 200 delivery ‘cloud kitchens’ across 16 Indian cities.