Temasek-backed meat and seafood startup Licious has reached a deal to buy out My Chicken and More, a Bengaluru-based company that runs a chain of offline stores, for Rs 150-200 crore, people aware of the developments told Moneycontrol. The deal will be a mix of cash and equity, with an earnout component attached to it.
The acquisition comes at a time when Licious, which has largely been an online-only company, is increasing its offline presence to tap into an increasing base of customers who prefer buying meat from physical stores. New-age consumer companies such as Sugar, Mamaearth and several others, that were largely focused on online channels initially are branching out and opening stores to diversify their income streams.
Licious has also realised this opportunity and had said it plans to open at least 40 offline stores by the end of the current fiscal year. It had only four stores at the beginning of this financial year. My Chicken and More, founded by S Mahesha of Shakthi Foods in 2007, has 22 stores across Bengaluru which will become a part of Licious as part of the deal and take the company closer to its target.
While the move to acquire My Chicken and More, a subsidiary of Shakthi Foods, will boost Licious omnichannel strategy, it will also strengthen the firm's presence in Bengaluru, one of Licious' biggest markets.
Bengaluru currently accounts for about Rs 250 crore worth of sales and that will increase to Rs 400 crore once Licious brings My Chicken and More under its fold. That is a considerable contribution, nearly 50 percent, as Licious has an annualised revenue run rate (ARR) of around Rs 800 crore ($100 million).
My Chicken and More is a profitable company that has a revenue of Rs 100-110 crore and an earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of 2-3 percent, as per sources.
"As part of the merger scheme, S Mahesha will join Licious and be part of the company for at least four years," one of the people cited above told Moneycontrol.
S Mahesha, CEO of Shakti Foods, has cut his teeth in the poultry industry for over two decades. He started his career back in 2003 at Uttara Foods and Feeds Pvt. Ltd. as a Sales Officer, handling the sale of poultry feeds to farmers across Hassan and Shimoga (both in Karnataka) districts.
"In 2005, he began working with Lifeline Tender Chicken, as a Marketing Officer for Institutional Sales. Following which, he decided to make a change in the meat retail market and take his goals (of starting his own venture) to fruition," the company said on its website.
Licious and My Chicken and More did not respond to Moneycontrol's request for comments.
The developments come at a time when companies such as Licious, Nandus, Venkys, Zepto, Tata's BigBasket and more are all competing to become the market leader in a crowded space. As the top cities show signs of saturation, companies are looking for newer avenues.
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Room for growth
Licious believes it has only scratched the surface so far and still has plenty of wiggle room. The total addressable market (TAM) for meat companies is around 30 million households and Licious has tapped only 4 million so far. India, as a meat consuming country, is yet to mature, Abhay Hanjura, co-founder of Licious, had told Moneycontrol earlier.
On the average, a meat consumer in India only eats 30 grams of meat in a day which is far below the global benchmark of about 150 grams. People in advanced economies, such as the US, consume 300 grams of meat per person per day. “There is still a lot to be done in India and we’re building Licious with a long-term vision,” Hanjura added.
With an intention to grow, Licious plans to focus on the top 20 cities in India, including Kolkata and Chennai, where it is yet to build a loyal customer base. The company is also diversifying its offerings by entering into newer categories like momos and the like which will also push up average order values (AOVs).
Licious currently has an AOV of around Rs 600, up from Rs 500 from 3-4 years ago, co-founder Vivek Gupta told Moneycontrol.
Gupta and Hanjura are also building their own ready-to-eat category, where they will sell curries, pastes and the like which can be consumed as an add-on during meat purchases. At the same time, Licious will open 4-5 offline stores by the end of June and further increase that count to around 40 stores by the end of the current fiscal.
It costs about Rs 40 lakh to set up one store as per Gupta’s estimates but Licious is well capitalised and won’t need to raise funds in the near future. “We have $100 million in the bank and will need to do only a pre-IPO round sometime in 2026,” Gupta said.
Founded by Gupta and Hanjura in 2015, Licious has grown fast and is the highest-funded company in the fresh animal protein business category. The company has raised about $490 million from Vertex Ventures, Bertelsmann India Investments, 3one4 Capital and several others. The Kamath brothers, Boat’s Aman Gupta and others are the prominent angel investors at Licious, which was last valued at $1.5 billion when it raised $150 million in March last year, as per Tracxn, a private markets data provider.
Apart from local butchers, Licious primarily competes with Amazon-backed FreshToHome which has raised about $290 million so far.
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