VRO Hospitality raises $10 million to expand

Mumbai: Bengaluru-headquartered VRO Hospitality, which operates 42 lounges and bars in the country, has raised $10 million in a bridge funding round led by Axis Bank and venture capital firm Gruhas, which is backed by Zerodha co-founder Nikhil Kamath.

The round includes a mix of equity and debt, and the company will use the funds to make acquisitions and expand its portfolio of brands, which currently number 10 and include Mirage, Taki Taki, and Los Cavos.

NB Ventures, Cred founder Kunal Shah, and actress Mouni Roy also participated in the funding round.

“This funding round marks a pivotal moment for us, empowering our efforts to redefine the hospitality experience through innovation and unwavering commitment to excellence,” said Dawn Thomas, co-founder and CEO of VRO Hospitality, who started the firm in September 2020, after selling his events company SteppinOut to DineOut, a Times Internet company that was subsequently acquired by food-ordering platform Swiggy.

Safdhar Adoor, and Sharath Rice are the other co-founders of VRO Hospitality.

VRO Hospitality has ambitious expansion plans, and aims to have 55 restaurants by the end of this financial year, with a topline of ₹300 crore, and 250 restaurants in the next four years, with $250 million in annual revenues, Thomas said.

“We have added 17 restaurants in the last year, and have 13 more in the pipeline. We have aggressive plans and 80% of the funding will go into acquiring new properties and expansion. The remaining will be used to build infrastructure and technology,” he added.

“Post-covid, the hospitality sector has witnessed exponential growth and rightfully so. VRO Hospitality has expanded across key markets in India. This successful bridge will help VRO Hospitality accelerate growth, expand its reach, and further solidify its position as a reputable brand and a disruptor in the dining industry,” said Abhijeet Pai, co-founder, Gruhas.

A bridge round is typically raised to finance operations or achieve certain milestones until the next round of funding comes along.

Incidentally, the three co-founders started an events company 15 years back, during college. Slowly, they also got exposed to the food side of the business. “Though we were predominantly an events company, organizing events across eight cities, we also started three-four restaurants with some angel funding. Later, after Times Internet took interest in our events company, we sold it and focussed on the restaurant business,” Thomas told Mint.

VRO Hospitality’s inception in 2020 during the covid-19 pandemic proved opportune. As established restaurants faced challenges, VRO seized the moment to acquire and grow, adding brands such as Café Noir, Plan B, and Caperberry to its portfolio.

“We are born during covid. We capitalized on the pandemic and as a lot of established restaurants were going bust, we started acquiring and growing,” Thomas said.

He highlighted the company’s diverse brand strategy, catering to various segments. With brands spanning casual, premium, and luxury categories, VRO Hospitality captures a wide audience. “There are luxury brands like Taki Taki and Mirage, and at the same time casual brands like Cafe Noir, Hangover, etc. While 40% of business comes from casual dining, 25-30% is from premium, and the remaining from luxury brands,” Thomas said.

Currently, VRO Hospitality operates outlets in key metro areas, including Bengaluru, Mumbai, Pune, Kolkata, Kochi, Ooty, and Hyderabad. The funding injection positions the company for strategic growth, further solidifying its presence in the competitive hospitality landscape.