New Delhi: Online meat store Zappfresh on Monday said it raised Rs20 crore from Dabur India vice-chairman Amit Burman and SIDBI Venture Capital, the direct investment arm of government-owned Small Industries and Development Bank of India.
Mint had reported talks of a potential investment by Burman in September last year.
Founded in 2015, Zappfresh supplies cold-stored fresh meat like chicken, mutton and sea food to customers in Delhi and parts of the National Capital Region. It sources from verified meat vendors and manages deliveries from a facility in Gurugram using its own fleet.
“I see a great potential in the ‘e-market for meat’ and Zappfresh has had an impressive growth story. The business model is innovative and the use of technology in the supply chain management has allowed for the possibility of a sustainable scale-up capability. I look forward to being part of this venture and its success," Burman said in a statement.
Zappfresh, which claims to be profitable, pitches itself as a platform for high-quality standardized meat, a category of food that is typically bought in the offline market. The firm claims it offers technology to vendors and supply chain participants through which it is able to optimize farm-to-consumer time, quality and costs.
Its major competitor is Bengaluru-based Licious, which raised $10 million from Mayfield India and 3one4 Capital in September last year.
“The fresh meat industry is highly fragmented and digitization of the market can also improve the value chain operating system of this industry. Zappfresh’s promise to offer a hassle-free meat buying experience of the highest quality is unique and has great potential," said Sajit Kumar, a senior vice president at SIDBI Venture Capital.
The latest deal highlights the growing investor interest in the on-demand food segment which has picked up steam after millions of dollars were poured into start-ups like BigBasket and Grofers and a host of food brands including Veeba Food Services.
Zappfresh said it will use the proceeds from this round to expand its teams and increase capacity as it looks to bring the service to other cities.
“The company would use the funds to hire people in key departments and increase storage capacity. We are very excited to have Mr Burman and SIDBI Venture Capital on board believing in our business and supporting our expansion plans. This investment will aid our back-end support along with expansion in newer markets after having laid a strong foundation in Delhi-NCR," said Deepanshu Manchanda, chief executive officer at Zappfresh.
Manchanda, who has earlier worked at digital wallet firm MobiKwik, and Shruti Gochhwal co-founded DSM Fresh Foods Pvt. Ltd, which operates Zappfresh.