Indonesian F&B startup Hangry is in talks to raise $10-15 million in its Series A round as it carves out its expansion plans amidst the COVID-19 crisis, a top company executive told DealStreetAsia.
“We see our loyal customers have spent higher (transactions) than before, but our brand has not yet become top of mind. Therefore, we want to invest in brand communication and expand to more cities,” Abraham Viktor, CEO and co-founder at Hangry, said.
The round is expected to close in January 2021, he added.
The startup plans to use the capital to expand its central kitchen and spruce up brand communication as the business grows during the COVID-19 pandemic.
Unlike other food merchants and restaurants, which bore the brunt of the pandemic after large-scale social restrictions were implemented, Hangry claims to have recorded brisk revenue growth through its food delivery business.
Despite seeing a 30 per cent fall in revenue during the first two weeks of lockdown in Jakarta, the business reportedly rebounded to witness a fifteen-fold revenue growth between March and November, said Viktor. The company got a boost when people shifted their preference to food delivery services over in-room dining restaurants during the pandemic, he added.
Hangry made headlines earlier this year when it raised around $3 million from Sequoia Capital’s accelerator programme Surge, venture capitalist Alpha JWC, besides a slew of angel investors.
It currently operates 43 outlets with five brands of food variants, ranging from fried chicken to coffee. All outlets fall under its cloud kitchen business and are located in Greater Jakarta and Bandung (West Java). Viktor targets to have a total of 48 outlets by the end of this year.
Hangry has forged partnerships with GrabFood and GoFood, in a bid to seize ‘millions’ of users. The startup is also in the process of building an app for customers’ loyalty programme.
Viktor, who is also one of the founding members of Hangry, was formerly the co-founder and CEO of P2P lending startup Taralite, which was acquired by payments giant OVO early in 2019.
He started Hangry in September last year to tap into the burgeoning opportunity in the F&B market in the archipelago.
Going forward, the company expects each of its outlets to generate sales worth at least Rp 900 million ($64,000) on a monthly basis from an average of Rp 600 million ($42,674) currently.
Viktor’s goal is to open 150 outlets across Indonesia in 2021 and 750 outlets in 2024. Even as the company wants to ramp up its cloud kitchen business, it plans to have a mix of food delivery and dine-in restaurants.
“People in big cities are used to using a food delivery service. We want to penetrate the market in the second and third-tier cities, we have to bring the dine-in concept as the food delivery is still small,” Viktor argued.
Meanwhile, Chandra Tjan, co-founder and general partner at Alpha JWC, who is an investor in the company said: “Their growth is tremendous; foods are super delicious; those are the key important factors. We will continue to support Hangry.”
F&B sector was one of the hardest sectors impacted by the social restriction to prevent the spread of COVID-19. The local media reported, Indonesia’s minister of tourism and creative economy, Wishnutama, revealed restaurants had a 70 per cent drop in revenue.
The crisis claimed several food business-associated startups. STOQO, a marketplace for F&B business, shut down operations in April 2020. Eatsy Indonesia, a local unit of Singapore-based food ordering and payment mobile app, suspended its operations due to the pandemic impact.
Yet, some F&B startups closed funding during the COVID crisis period. In May 2020, coffee chain Kopi Kenangan snagged $109 million in its Series B round, led by Sequoia Capital. Indonesia’s small eateries startup Wahyoo raised $ 5 million in a Series A round led by Intudo Ventures while Yummy Corporation bagged $12 million in its Series B funding, led by SoftBank Venture Asia.