EXCLUSIVE | SAIF Partners in talks to back Country Delight at Rs 1,000 crore valuation

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SAIF Partners, one of India’s leading venture capital firms, is in advanced talks to lead a Rs 100-crore round in direct-to-consumer milk startup Country Delight, sources have told Moneycontrol.

The round will value Country Delight at Rs 1,000 crore, up from the Rs 600 crore it was valued at in February 2019. Existing investors Matrix Partners and Orios Venture Partners are expected to participate in the round as well.

“They are growing well, and the unit economics are good so far, so it is a sustainable model, although in a premium category, where their price points are relatively high,” said a person close to the company, requesting anonymity.

SAIF Partners and Country Delight did not respond to Moneycontrol’s emails seeking comment.

Founded in 2013 by Chakradhar Gade and Nitin Kaushal, Country Delight runs a full-stack subscription model. It has cow farms and it also pasteurises, tests and delivers milk, eliminating the middleman.

The Delhi-NCR-based, which delivers in Pune, Mumbai, NCR and Bengaluru, has a revenue of about Rs 30 crore and an EBITDA of Rs 3 crore per month, indicating it is close to profitability. EBITDA is earnings before interest taxes depreciation and amortization.

Country Delight is also the only venture-backed player in the D2C milk brand market. Other startups such as DailyNinja and Milkbasket focus only on delivery of milk and dairy items, and aggregate them from various stores—not manufacture themselves.

The micro-delivery model—to deliver a few items regularly— has not proven to be sustainable, so far, as these startups have been exploring acquisitions by larger companies to survive.

Grocery delivery firm BigBasket acquired DailyNinja in March this year and Milkbasket is learnt to be in talks with possible buyers.

Country Delight competes with Parag Milk Foods Ltd, a listed stock whose brand Pride of Cows runs a similar premium subscription-based delivery model.

For the quarter ended March 31, 2020, Parag Milk Foods reported a net profit of Rs 8.5 crore, on an operating income of Rs 524 crore, less than Rs 26.8 crore profit on an income of Rs 623 crore for the December 2019 quarter.

Country Delight last raised $10 million in February 2019 led by Matrix. It has also raised debt from Alteria Capital, a venture debt firm.

Incoming investor SAIF has been active in the consumer and online brands segment. Its portfolio includes online furniture retailer Urban Ladder, baby products firm FirstCry and quick service restaurant chain Chaayos.

In 2019, it also invested in Mosaic Wellness, which aims to build a slew of digital-first consumer brands in the health and wellness space.