Bengaluru-based VRO Hospitality, which owns and operates F&B brands such as Mirage, Hangover, Badmaash, Nevermind, and Tycoons, has raised $3 million (Rs 22.5 crore) in a mix of equity and debt funding.
The round includes $1.5 million of equity capital, led by boutique investment banking firm CreedCap Asia Advisors, along with undisclosed angel investors, and $1.5 million of debt, raised in a revenue-based financing model.
About 80 per cent of the fresh capital will go into new projects, 10 per cent on technology and team building, and 10 per cent on cloud kitchen brands, Dawn Thomas, Co-founder of VRO Hospitality told Business Today.
Debt is being used to scale the stores where partners invest in individual stores and get quarterly profit share (IRR-based).
Founded by Thomas, Safdhar Adoor and Sharath Rice, VRO Hospitality operates multi-format restaurants, cafes and lounges across 18 outlets in Bengaluru. The founders' previous venture, an event curator platform SteppinOut, was acquired by Dineout, the restaurant services and reservation platform owned by Times Internet.
Post the acquisition, the founder trio was operating a couple of F&B outlets and saw an opportunity to snap up Covid-hit F&B brands. They acquired a number of F&B brands including PlanB, Café Noir and Fava, and brought all of its outlets into one company under VRO Hospitality.
At present, VRO owns and operates eight brands across fine-dining, casual-dining, QSR and Café space and employs about 600 people.
Thomas said the company has 16 projects in the pipeline currently across 5 cities including Bengaluru, Goa, Mumbai, Kochi, and Chennai.
It aims to open 30 outlets by the end of this financial year; scale some of its brands across India, Singapore and Dubai; and expand the team size to 1,200 employees.
"This decade, F&B brands will be hybrid in nature of operations and own the online/offline experience for customers. The founders at V&RO sold their last business to Dineout and we believe they are the right team to back for this hybrid model," said Vishal Pereira, Managing Director at CreedCap Asia.
The company has also launched three cloud kitchen brands to make use of its existing kitchens. "Cloud kitchens and food delivery as space have tremendous potential, and this was very evident during the first lockdown, and this format allows us to reach out to consumers in locations where a physical dine-in restaurant would not be a practical possibility. We have made four different brands that will operate from our existing kitchens at no extra cost. Once we hit about 30 outlets, we will have about 50-60 dark kitchens operating out of them," Thomas added.
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