Coatue may lead $120 mn funding in Faasos parent2 min read . Updated: 19 May 2019, 11:33 PM IST
- Deal will mark New York-based hedge fund’s second Indian investment after Swiggy
- New York-based hedge fund Coatue plans to invest $100 million in the latest funding round
New York-based technology hedge fund Coatue Management is in talks to lead a $120 million funding round in Mumbai-based Rebel Foods, best known for its Faasos brand of cloud kitchens, said three people aware of the matter on the condition of anonymity.
A potential deal would mark Coatue’s second investment in India. The company, founded by Philippe Laffont, invested a total of about $100 million across two rounds in food delivery startup Swiggy last year, which was last valued at $3.3 billion. The funding in Rebel Foods is being worked out at a post-money valuation of $500 million, said the three people mentioned above.
Mint first reported on 28 January that Rebel Foods had appointed Bank of America Merrill Lynch to advise on the fundraise and seek new investors to raise up to $150 million. Rebel’s existing investors include Evolvence, a UAE-based private equity fund, Sistema Asia Ventures, Sequoia Capital, and Lightbox Ventures.
Founded in 2011 by Jaydeep Barman and Kallol Banerjee, Faasos rebranded its holding company as Rebel Foods last October, as Rebel owns and operates multiple brands such as biryani-maker Behrouz and pizza-maker Oven Story.
The cloud-kitchen model involves delivery-only restaurants and brands—saving on real estate costs—and using a robust logistics network to reach more households.
Coatue plans to invest $100 million in the latest round, while existing investors will pump in $15-20 million in Rebel Foods, said one of the people mentioned above.
Indonesia-based ride-hailing firm GoJek—one of Asia’s hottest startups, valued at $9.5 billion—also plans to invest $5 million as part of the round through Go Ventures, its investment arm. Rebel has also tied up with GoJek to introduce its cloud kitchens in Indonesia, the person said.
“While there was huge investor interest for raising even $170-180 million, Rebel decided to stick to its original plan to avoid excessive stake dilution and because they did not immediately need so much capital," the person said.
Rebel, Coatue, Sequoia, Lightbox, and GoJek did not respond to emails seeking comment.
Coatue has been bullish on the food tech sector globally, with investments in SoftBank-backed American delivery startup DoorDash, which was valued at $7 billion earlier this year, and in China’s delivery unicorn Meituan Dianping, which is also an investor in Swiggy. Coatue’s other investments include tech giants such as Facebook, Alibaba, and Tencent.
As part of the ongoing fundraise, Rebel has already raised ₹110 crore in March from existing investors Sequoia, Lightbox, and Evolvence. It also raised ₹30 crore as debt from Alteria Capital, which provides loans to startups.
“Rebel will use the funds to expand its network of kitchens from the 200 to 500 and expand to Dubai and Indonesia, before expanding to other countries in South-East Asia," another person mentioned above said. “It also plans to invest in automation and robotics, which will help reduce manual labour in its kitchens," the person said.