With new and emerging concepts hitting up the Indian food space, 2015 saw seventeen deals in the space with an increase in investment flow by 93 per cent to $130.3 million.
According to Chennai-based Venture Intelligence, food technology start-ups attracted $130.3 million investments between January and September 2015. The five deals in 2014 brought in $67.7 million and six deals in 2013 $42.06 million, reported Business Standard.
This year's top three deals are $16.25 million pumped in by Sequoia Capital, Nexus Venture Partners and Matrix Partners into TinyOwl, $16.5 million by SAIF, Norwest, Accel and DST Global in Swiggy and $60 million by Temasek and Vy Capital in Zomato.
Experts also said that food start-ups would continue to thrive for five years and the popular one will be Zomato, Quinto, ChefHost, MeDine, Momoe, DineOut, BigBasket, HalfTeaSpoon, Eatlo and Fresh Menu.
Investment in food start-ups rises 93 per cent in 2015 "We have seen immense growth in the last one year in Mumbai. TinyOwl has partnered more than 4,000 restaurants," said Harshvardhan Mandad, co-founder, TinyOwl.
"There is huge potential and more start-ups will grow substantially over the next five years with slight changes in the business model. They may be acquired early," said Vikram Gupta, founder and MD of IvyCap Ventures.
Online food delivery in India grew 40 per cent to Rs 350 crore in 2015 and accounted for 17 per cent of the online services market, according to the Internet and Mobile Association of India (IAMAI). Restaurant discovery portal Zomato launched its ordering service in April.
Investment in food start-ups rises 93 per cent in 2015 Hyperlocal delivery services, such as Roadrunnr, which received an investment of $11 million in June and Delyver, which was acquired by Big Basket in the same month, have latched on to this growth. "There will be significant value creation in online food ordering, and a mobile-only approach is the way to win. TinyOwl is a part of our broader portfolio of investments in local services and this will be an important area," said Rishi Navani, co-founder and MD, Matrix India.
According to Sarath Naru, managing partner of Ventureast, "We are staying away. One of the things we look at it is a business should have backward integration."
Valuation in the segment is another challenge, according to investors. "They are seeking valuation of three years from now. But competition is also increasing. People are realising if you are looking at 20 companies, you do not necessarily have to work with the one seeking the biggest valuation," said a venture capital investor.