Singapore’s Temasek Holdings is near to acquiring a 20-25% stake in Rebel Foods for $180-200 million, making it the largest shareholder. The investment signals confidence as Rebel Foods prepares for an IPO in the next year. Founded in 2011, Rebel Foods operates 450 kitchens and brands like Faasos and Behrouz Biryani, with a focus on expanding its food court business, Eatsure, alongside strong financial recovery.
Temasek Holdings, a notable investment firm based in Singapore, is reportedly on the verge of acquiring a 20-25% stake in Rebel Foods for an estimated $180-200 million, which would position it as the largest shareholder of the prominent cloud kitchen operator. According to sources familiar with the situation, Temasek intends to purchase this stake from existing investors including Coatue Management, Lightbox, and Peak XV. Rebel Foods, recognized for its extensive portfolio of cloud kitchen brands such as Faasos, Behrouz Biryani, and Mandarin Oak, is reportedly preparing for an initial public offering (IPO) within the next 12 to 18 months. The stake acquisition will be executed by Temasek’s subsidiary, Jongsong Investments Pte. Ltd., as documented in a filing with the Competition Commission of India (CCI). While Temasek has declined to comment on the matter, there has been no response from the aforementioned investment firms and Rebel Foods concerning inquiries for further information. Claiming to be the world’s largest cloud kitchen network, Rebel Foods joins a growing list of companies contemplating IPOs amid secondary stake sales from early investors, a trend which has also been observed in firms such as Urban Company, Swiggy, and Lenskart. Founders currently maintain approximately a 12% stake in Rebel Foods, with Qatar Investment Authority holding around 9.9%. A report from DC Advisory in July indicated a notable increase in secondary and buyout deals related to profitable companies since the beginning of 2023. Interestingly, these transactions accounted for roughly 50% of the overall deal value during the first half of 2023, escalating to 62% for deals surpassing $50 million. There is a minor primary component associated with this funding round, which was raised at a valuation of $1.4 billion—a value consistent with previous rounds—while the secondary shares are being transacted at a valuation estimated between $700-750 million. Rebel Foods had successfully raised $175 million in its Series F funding round back in October 2021, with the investment led by Qatar Investment Authority at the aforementioned valuation of $1.4 billion. Although there have been no official comments from the company regarding the current developments, sources have indicated that a significant portion of the new funding is slated for expanding Eatsure, the company’s food court venture. Additionally, Rebel Foods has been actively engaging with fast food chains such as Wendy’s to augment its presence in India, currently running 10 Eatsure locations across several cities. Founded in 2011 by entrepreneurs Jaydeep Barman and Kallol Banerjee, Rebel Foods operates over 450 kitchens across 70 cities, offering a diverse array of over 45 brands, including Oven Story Pizza, The Good Bowl, SLAY Coffee, and Sweet Truth, along with offline outlets in several regions including India, the United Arab Emirates, Saudi Arabia, and the UK. The company reported a significant reduction in losses, decreasing to ₹378 crore in FY24 from ₹657 crore the previous fiscal year, attributed to improved margins and economies of scale. Furthermore, the annual revenue rose modestly to ₹1,420 crore in FY24 from ₹1,195 crore, amidst stable operational expenses totaling ₹1,857 crore.
Rebel Foods is a leading player in the cloud kitchen industry, which refers to food preparation facilities that serve delivery-only meals. The company operates a diverse array of brands and has experienced substantial growth alongside increasing consumer demand for food delivery services, particularly amplified by the COVID-19 pandemic. The company’s planned IPO and recent investments indicate strong industry confidence and continued focus on expansion strategies within the competitive food sector. Temasek, as a significant global investment firm, has been actively seeking to diversify its portfolio, and this acquisition aligns with trends in venture capital where profitable companies are seeing increased investments before public offerings, thus signaling robust market interest.
In conclusion, Temasek Holdings is poised to enhance its investment portfolio significantly with the impending acquisition of a 20-25% stake in Rebel Foods, a key player in the cloud kitchen sector. This strategic investment reflects the growing trend of secondary sales leading up to IPOs in today’s market. With a strong brand portfolio and plans for expansion, Rebel Foods continues to assert itself as a leader in the food delivery industry, showcasing resilience through improved financial performance and strategic partnerships.
Original Source: www.livemint.com
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