Singapore-based Equentia Natural Resources has led a round of seed funding worth $151,371 in Indian firm Roll Mafia, a quick service restaurant (QSR) chain owned and operated by SLS Cuisines India Pvt Ltd,
Other investors participating in the seed round were Nirav Choksi and Rajiv Ramnarayan, co-founders and directors of Singapore-based HHC Holding Pte Ltd. Other high net worth individuals (HNIs) involved in the round were including Bhavin Shah, Manav Khanna and Ram Kewalramani.
According to official statements from Roll Mafia, the funds from this capital infusions will be used to enhance its technological offerings, improving marketing strategy, scaling its operations in Pune and and expanding its core management team. Roll Mafia specialises in specific Indian cuisines, such as kathi rolls and dum biryani, among other products.
Co-founded in 2012 by brothers Vishal Sahay and Varun Sahay, Roll Mafia operates in three locations in Patna and eight locations in Pune, operating with a hybrid offline-online model for the two cities. Currently, they maintain 70 staff on their payroll an plan to hire 250 more as operations expand. They also plan to deepen their footprint in Pune with the opening of four additional units by October 2015.
“In Patna, we do very little home delivery because our biggest signature store at SK Puri is 10 minutes from anywhere. People still prefer the personal touch and like to make an outing for a meal. In Pune, home delivery is a way of life especially for the IT and college kids,” said Varun Sahay.
Prior to launching Roll Mafia, Varun Sahay had managed their family’s mining business, while younger brother Vishal Sahay worked in the Indian financial services sector.
With plans to establish 50 more outlets across major metropolitan areas in Mumbai, Chandigarh, Baroda, Bengaluru, Delhi and Gurgaon by March 2016, the founding team is said to be targeting a topline of US$1.5 million for the financial year ending March 31, 2016.
This investment comes amidst a slowdown in growth in the QSR segment, with international QSR brands expanding into India struggling to maintain momentum and acquire customers. For instance, the Economic Times has reported that Yum! Brands – franchise owner of the Pizza Hut, KFC and Taco Bells brands in India – has reported an 11 percent year-on year decline in sales Q1 2015.
Attributed to what Yum! Brands termed “continued softness in the overall macro environment and consumer sentiment”, this is contrary to the findings of the Nielsen Consumer Confidence Index, which noted that online urban Indian consumers are among the most confident globally, as of Q4 2014.
According to market research by Food Navigator Asia, with a market size estimated at US$960 million, India’s QSR segment is expected to grow by 26 percent per annum, reaching each year to reach US$1.77 billion by 2017. This growth is driven by the entry of international brands, as well as local players expanding their own businesses.
However, despite this rapid growth, it is expected to continue to be a negligible portion of the Indian food economy, composing only 2 to 3 percent of the entire market size.
The QSR market in India is also intensely competitive at this point, due to intense competition to grow market share and acquire customers. Many brands are offering discounts and and investing in promotional offers and marketing, while targeting the same demographic.
“The QSR and cafe industry is getting into a circular firing-squad formation, trying to kill each other to grab market share, as if this is the only way to grow in an early stage growth market,” said Jaspal Singh Sabharwal, partner at Everstone Capital, local master franchisee for Burger King, in a statement to the Economic Times.
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