Healthy snacking brand Farmley has raised $40 million in its series C funding round, which was led by global consumer investment firm L Catterton and other existing investors, such as DSG Consumer Partners.
The large funding round comes as the company’s revenues jumped nearly 60% to ₹370 crore in FY25 and expects to further reduce losses and inch closer to becoming Ebitda profitable, Farmely’s co-founder Abhishek Agarwal told Mint in an interview.
The round was largely primary, with a small secondary component that saw some of the angel investors exit. While the company did not disclose details around the valuation, Farmley plans to use the proceeds to ramp up its presence in the dried fruits and nuts segment of India’s growing healthy snacking market.
“The bulk of the funds will go towards enhancing our state-of-the-art infrastructure to meet the growing demands. We are also planning to enter new product categories and formulations,” Agarwal said. “We are focusing on building our offline distributions across different geographies while opening up our export segments.”
Farmley’s new capital infusion also marks a huge leap from its previous round in December 2023, when it raised $6.7 million in a pre-Series B round led by BC Jindal Group with participation from existing investors DSG Consumer Partners, Omnivore, and Alkemi Partners. The round valued the company at about ₹350 crore, according to data from market intelligence provider Tracxn.
To be clear, Farmley does not operate its own stores but has a presence in offline establishments such as supermarkets and through other franchisee-based partnerships. Over the last two years, the company has invested heavily in its online channels, which include quick commerce and e-commerce.
Revenue growth
In FY24, the company’s revenue from operations grew to ₹230 crore, compared to ₹169.83 crore in FY23. It also narrowed its losses to ₹26 crore from ₹33 crore a year earlier.
Agarwal explained that presently Farmley receives about 45% of its business from quick commerce, 25-30% from e-commerce, 10% from modern trade such as supermarkets, 7-8% from general trade, and the remaining from its partnerships with different airports and airlines such as Akasa and Air India.
Broadly, the dried fruits and nuts segment of India’s healthy snacking market is expected to grow by about 14% annually over the next 6 years to cross $8.5 billion by 2031 on the back of secular tailwinds. They include consumers’ increasing propensity to swap unhealthy snacks for healthier ones and to satiate dietary needs for post-workout nourishment and other small meal replacements.
Brands like Farmley also benefit from consumers increasingly opting for branded snacks that offer consistent quality through organized sales channels with better hygiene standards. Other brands in the space include Paper Boat Foods, Happilo and Nutri Binge.
Founded in 2017 by Agarwal and Akash Sharma, Farmley offers guilt-free snack products through its omnichannel distribution. These range from makhana-based munchies and indulgent date bites to flavourful trail mixes and roasted nuts. Beyond its pan-India presence, Farmley also operates in the US, Australia, Dubai, and Singapore.
“We are still understanding the intricacies of those markets and the kind of flavours people prefer there,” Agarwal said, adding that the export business is still in its early stages.
Brand investments
“Overall, we have invested in building the brand over the last year, and as we scale across our business vertices, our losses will also reduce. We aim to become profitable and grow by at least double for the next 2-3 years. Our fundamentals have always been strong as we have tight control over our supply chain and distribution strategies, and we will continue that trajectory going forward,” he said.
Meanwhile, L Catterton has handled about $37 billion of equity capital across three multi-product platforms: private equity, credit, and real estate. It has made about 300 investments in various consumer brands across the world and has significant experience building brands in the packaged food sector across the world.
Last year, the investment firm announced its joint venture partnership with former Hindustan Unilever Ltd (HUL) chief executive officer Sanjiv Mehta to deepen its presence in India. The JV may acquire a mix of minority and majority stakes in a range of enterprises spanning startups raising Series B funds to more established companies, with deal sizes typically from $25 million to $150 million.
Some of its current and past investments include Cholula Hot Sauce, Ferrara Candy Co., Goodles, Kettle Foods, Kodiak, Little Moons, NotCo, Planted, Plum Organics, Reliance Jio Infocomm, Sugar Cosmetics and Drools Pet Food.
Key takeaways
- The healthy snacking brand raised $40 million in its latest funding round led by L Catterton, significantly surpassing its previous $6.7 million pre-Series B round in December 2023.billion
- Farmley’s revenue jumped nearly 60% to ₹370 crore in FY25. In the coming years, the company plans to reduce losses and move closer to Ebitda profitability.
- The funds will strengthen Farmley’s presence in India’s dried fruits and nuts segment, expand into new product categories, and enhance offline and export distribution channels.
- The company has invested heavily in its online presence, with 45% of its business coming from quick commerce, alongside supermarket and franchise-based partnerships.
- The dried fruits and nuts segment is projected to grow at 14% annually, reaching $8.5 billion by 2031, driven by increasing consumer demand for nutritious snack options.
