Bengaluru-based B2B online meat and seafood startup, Captain Fresh, has successfully raised Rs 110 crore in an extended series C funding round. The funding was led by Andhra Pradesh-based seafood exporter Nekkanti Sea Foods, contributing Rs 50 crore, and investment firm Shakti Finvest Pvt Ltd, investing Rs 30 crore.
Funding Details and Share Issuance
The substantial funding was accomplished through the issuance of 1,102 convertible preference shares, each priced at over Rs 9 lakh. Nekkanti Sea Foods took the lead as the primary investor, injecting approximately Rs 50 crore, while Shakti Finvest played a significant role with an investment of Rs 30 crore in the latest funding round.
Previous Funding Rounds and Valuation
This recent funding follows Captain Fresh's September round, where the company secured $20 million from SBI Investment and Evolvence Capital. This extended funding round valued Captain Fresh at an impressive $500 million (over Rs 3,900 crore). Previous investors include Accel, Matrix Partners India, Prosus Ventures, and Tiger Global Management.
Business Model and International Presence
Captain Fresh operates on a business-to-business (B2B) model, providing meat and seafood to sellers not only in India but also in international markets such as the Middle East, Europe, and the US. According to Utham Gowda, the founder and CEO, international markets contribute significantly to the company's success, commanding higher EBITDA margins compared to the Indian market.
Industry Challenges and Market Insights
In November, the online meat industry faced challenges due to full-fledged reopening of physical meat markets and external factors like inflation, resulting in a sector slowdown. Satish Meena, an independent ecommerce analyst, estimated the industry's size to be between Rs 2,500 crore to Rs 3,000 crore, representing less than 1% of the country's overall meat and seafood market, which largely remains unorganized.
Series C Funding Details and Company Valuation
In the extended series C funding round, Captain Fresh raised $13.25 million, issuing 1,102 Series C6 compulsory convertible preference shares at a premium price. The round was led by Nekkanti Sea Foods with Rs 50 crore, and Shakti Finvest contributing Rs 30 crore. Ravi Shankar Pemmasani and Shibu Mathai also participated, contributing Rs 27.46 crore and Rs 2.50 crore, respectively.
Captain Fresh's current valuation stands close to Rs 3,970 crore, and with this fresh capital injection, the company has now raised approximately $150 million to date.
Operational Landscape and Stakeholder Changes
Captain Fresh operates as a farm-to-retail platform, sourcing animal protein directly from agents or farmers and supplying through various channels, including B2B, B2R, and B2B2C. Following the recent funding, the CEO and founder's stake in the company have diluted to 19.20%, while Nekkanti Sea Foods, Shakti Finvest, and Ravi Shankar Pemmasani now hold stakes of 1.26%, 0.76%, and 0.69%, respectively. Matrix Partners remains the largest external shareholder with a 13.44% stake.
According to TheKredible, Captain Fresh's gross revenue witnessed an impressive nearly four fold increase, reaching Rs 817 crore in the fiscal year ending March 2023. However, losses also surged by 2.6 times to Rs 294 crore during the same period, reflecting the company's aggressive growth strategy in the competitive online meat and seafood industry.
Captain Fresh's latest funding round positions the company for further expansion and consolidation in both domestic and international markets, amidst the evolving challenges and opportunities in the online meat and seafood sector.
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