Going nuts: Dry fruit companies Nutraj and Farmley prepare to raise over $40 million each as investors line up to take a bite

Several times, while bootstrapped companies have a better profit profile, their growth, over the years, is not exponential as is the case with venture-backed firms.

Dry fruit companies Nutraj, operated by VKC Nuts, and Farmley are both preparing to raise over $40 million (around Rs 340 crore) each from a slew of investors, several people aware of the developments told Moneycontrol.

At large, several Indian consumers, especially the younger cohort, are moving towards the consumption of healthier snacks which is driving up the demand for dry fruits, especially fox nuts (makhana) which is growing in popularity among consumers worldwide. As demand grows, the investor interest in companies also rises.

VKC Nuts, one of the oldest dry fruit companies in India, is nearing a deal to raise $35-40 million (around Rs 300-340 crore) from Belgium-based Ackermans & van Haaren (AvH), Singapore-based Venturi Partners and homegrown private equity firm CX Partners.

“Nutraj doesn’t need capital since it is a profitable and an established business. However, it has seen its new-age rivals raise money from venture capital firms and create a stronger brand recall consistently – which has driven its decision to raise external capital,” one of the persons cited above told Moneycontrol.

VKC Nuts, or Nutraj as it is popularly known, had a revenue of Rs 892 crore in FY22, Rs 809 crore in FY23 and its current revenue run rate is around the Rs 1,500 crore mark, the person added.

On the revenue front, Nutraj is far ahead when compared to A91-backed Happilo, one of the most popular new-age dry fruit brands, which had revenues of Rs 170 crore in FY22, Rs 304 crore in FY23 and Rs 331 crore in FY24, filings showed.

Nutraj’s profit profile is better, too. While Nutraj had registered profits in the range of Rs 17-23 crore between FY22 and FY24, Happilo’s incurred losses in the Rs 109-204 crore range.

Several times, while bootstrapped companies have a better profit profile, their growth, over the years, is not exponential as is the case with venture-backed firms, which eventually take the cake, one of the persons cited above said. Discount brokerage firms Zerodha (bootstrapped) and Groww (venture funded) are good examples. “VKC’s strategy can be viewed with the same lens. It doesn’t want to miss the chance to grow a faster clip,” the person added.

Nutraj, in response to Moneycontrol’s queries said: “We at Nutraj do not respond to market rumors and speculations.” AvH, CX Partners and Venturi Partners did not reply to Moneycontrol's queries.

Competitive landscape 

Nutraj and Happilo compete with DSG Consumer Partners-backed Farmley, another dry fruit firm which is in talks to raise a fresh round of capital, at the same time as Nutraj, as per sources.

Noida-based Farmley is in advanced stages to raise $40 million (around Rs 340 crore) from US-based L’Catterton, a consumer-focussed private equity player, people in the know told Moneycontrol.

“The discussions are still ongoing so the deal contours, including the investor mix, may change slightly as talks progress,” one of the persons said.

Farmley and L’Catterton did not reply to Moneycontrol's queries.

L’Catterton in India has backed Pepe Jeans, pet food company Drools, beauty and personal care brand Sugar, among others. It is increasing focus on India, the world's third-largest startup ecosystem, and recently formed a new investment vehicle in partnership with Sanjiv Mehta, former Chairman/CEO and Managing Director of Hindustan Unilever Limited (HUL), to increase exposure in the country.