Mumbai-based FMCG brand Epigamia, owned by Drums Food International, has raised Rs 182 crore ($25 million) in a round led by Danone Manifesto Ventures – the venture capital arm of French multinational food-products corporation Danone.
The Series C round was co-led by Belgium-based consumer- focused investment firm Verlinvest, with participation from existing investor DSG Consumer Partners (DSGCP), new investor Samina Vaziralli, Executive Vice Chairperson of Cipla, and venture debt participation from InnoVen Capital.
“This investment, our first with Danone Manifesto Ventures in Asia, is a perfect fit…We look forward to putting Danone’s resources and expertise to use in supporting Epigamia’s talented team as their business continues to expand across India,” said Laurent Marcel, Managing Director of Danone Manifesto Ventures.
Danone had exited the Indian dairy products market last year, however, it is still in the nutrition business through its brands Protinex and Farex that it had acquired from Wockhardt.
In an interaction with DEALSTREETASIA, Rohan Mirchandani, CEO and Co-Founder, Epigamia, said, the investment made by Danone’s VC arm and not Danone – the food brand, would not have a bearing on the Drums Food’s brands and operations.
“Manefesto Ventures is an independent venture arm of Danone, in which Danone is an LP. We will continue to operate the way we are, and their involvement will be the same as Verlinvest or DSG,” he said.
Drums Food, founded in 2008, had initially launched its ice-cream brand Hokey Pokey and Greek yogurt brand Epigamia. While it continues to own the Hokey Pokey brand, it has exited the ice-cream business, but may use the brand to launch other premium products in the future, said Mirchandani.
“We may look at launching other products under the Hokey Pokey, which is an indulgent brand, in the future, which may tie into our acquisition strategy also,” he added.
In 2017, Drums Food had raised a Rs 90 crore Series B round led by Verlinvest and DSG Consumer Partners. Prior to that, the two investors had also led a $6.6-million Series A funding round in 2016.
This latest round of funding will help the company to build on its cold chain capabilities and expand distribution across 25 cities in India from five now. Drums Food also plans to introduce new products and build on its range of products with unique value propositions like high protein, lactose-free, and probiotics.
Apart from its Greek yoghurt, the company also offers Artisanal Curd, India’s first lactose-free curd; Epigamia Mishti Doi, a contemporary take on the traditional Bengali dessert; and Greek Yogurt Smoothies, a high protein drinkable yogurt.
The company is also exploring inorganic growth opportunities apart from setting up its own manufacturing units in south India, to aide its expansion plans, for which is has set aside a part of the funds raised.
“Our focus is now to invest behind expanding our distribution and strengthening our cold chain capabilities to enable us to go more into Tier 2-Tier 3 cities,” said Mirchandani. “We continue to be opportunistic towards acquisitions. Since our focus is to build cold chain network, we see opportunities that we can acquire that would fit into our cold chain distribution plans and have synergies with us.”
Currently the company has partnered with third-party manufacturers in north India for its productions, however it has plans to set up its own manufacturing unit in southern India to help it penetrate into that market.
“We are looking to expand with our third party manufacturers and will invest in their technology and manufacturing equipments. On the side we are also planning to set up our own facility in south India in the next 8-10 months,” said Mirchandani.
While the company is receiving interest from overseas markets for exporting its products, Mirchandani said that the focus was currently on the Indian market, which still holds huge potential for the company.