Exclusive: FreshMenu scores new round with a steep haircut in valuation

Full stack foodtech platform FreshMenu has raised a new round from Florintree Solutions with a steep cut in its valuation. This would be the first major funding round for the Bengaluru-based company in the past three  years.

FreshMenu has allotted 100 equity and 14,85,642 series C non convertible preference shares at issue price of 336.95 per share amounting to Rs 50 crore from Florintree, its regulatory filings with Registrar of Companies (RoC) show.

Post allotment of these shares, Florintree holds 26.683% of Fresh Menu which offers healthy salads, wraps, sandwiches, biryani along with rice and noodle bowls among others.

As per Fintrackr estimates, the company has raised the new funds at a post money valuation of around Rs 210 crore. This marks a steep haircut in the company’s valuation as compared to Rs 405 crore in the previous round. 

Fresh Menu has declined to comment on its valuation in this round.

This is the first investment in the foodtech company by private equity firm Florintree Advisors led by Mathew Cyriac. Cyriac was the managing director of Blackstone Group in India and his firm has recently invested in startups including Freight Tiger, Satin, Data Patterns  and Mobikwik.  Before this round, FreshMenu had raised funds from Lightspeed India, Zodius Technology fund and Vistra India in January 2021. 

Apart from the funding, Freshmenu also increased its employee stock options (ESOPs) pool by 149.2% to 3,11,623 ESOP options from 1,25,000 options. According to Fintrackr’s estimates, the new ESOP pool now constitutes 5.28%.

The Covid-19 led disruptions during FY21 had eaten up 52% of FreshMenu’s scale. The company’s revenue from operations dwindled to Rs 50.17 crore in the fiscal year ending March 2021 from Rs 104.57 crore in FY20. 

Due to shrinkage of scale, FreshMenu’s losses also reduced by 33% to Rs 7.34 crore in FY21 as compared to Rs 11 crore in FY20.

The new round is very crucial for the company as it has been struggling to raise a sizeable funding in the past three years. In early 2019, SoftBank-backed Oyo engaged FreshMenu for acquisition but the deal didn’t get through for some unknown reasons.

Amidst funding crunch, the company’s revenue also halved in FY21 and it would be interesting to watch how Fresh Menu covers the lost ground in FY22 and grow further in FY23 with new funding.