Tiger Global, A91 Partners participate in Box8’s $30 million secondary funding round

Mumbai-based investment fund A91 Partners will also participate in the secondary purchase of shares, which will see existing backer IIFL sell part stake in the company, said people aware of the development. IIFL Seed Venture Funds, the venture capital and private equity arm of IIFL Wealth & Asset Management had first backed Box8 in 2016. IIFL and A91 will also purchase new shares as part of a primary infusion in EatClub Brands.

Eatclub had raised capital from New York-based Tiger Global which led
a
$40 million infusion in the company. The ongoing secondary transaction is an extension of the last round when the company was valued at $300 million. ” The secondary sale of shares is complete and all formalities should be closed soon….the size of the round is slightly more than what was initially planned,” said a person in the know of the developments who did not want to be named as talks are private.

When contacted by ET, Anshul Gupta, cofounder, EatClub cofounder, confirmed that a secondary transaction was underway. ” As part of our last round, Tiger Global is doing an additional secondary tranche worth almost $11 million.” Gupta said he cannot comment on other investors coming on board. He added that angel investors were exiting with a good return as part of the secondary deal. Tiger Global declined to comment while A91 Partners and IIFL did not respond to ET’s query.

Mumbai-based EatClub Brands was founded in 2012 by IIT-Bombay graduates Gupta and Amit Raj.

The multi-brand cloud kitchen pivoted from a Mexican quick-service restaurant chain to its current model in 2014 and operates eight brands, including Box8 and Mojo Pizza, and is present in five cities including Mumbai, Bengaluru, and Pune. The company also runs 150 cloud kitchens, whose earnings before interest, depreciation, tax, and amortisation (Edbita) varies between 20-30% depending on the locality, age of the kitchen, Gupta told ET.

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In an interview to ET, earlier this year, Gupta said that about 55-60% of orders on New Year’s Eve – which sees a huge spike in demand for food aggregators Zomato and Swiggy – came through its direct ordering channel. EatClub competes with other cloud kitchen brands like Curefoods and Rebel Foods that are investing money to build their own direct ordering application.

There has been heightened activity in the cloud kitchen space in recent months, with two back-to-back mergers since January 2022.
Curefood, which raised $62 million in January, announced its merger with rival Maverix in the same month. Meanwhile,
Kitchen Center and Kitchen@ also merged to fuel pan India expansion of their cloud kitchens.

The sector also
birthed its first unicorn – Rebel Foods – in 2021. EatClub is utilising the funds to open new kitchens, expand to new cities, and invest in technology. Its annual revenue run rate was close to Rs 100 crore in December 2021. The startup has close to 150 employees and operates its own delivery fleet of about 1,500 riders.