Wingreens Farms in talks to raise $10 mln from Investcorp, Peak XV and others

Founders of the company confirmed the developments to Moneycontrol but did not comment on the size of the deal.

Farm-to-retail company Wingreens Farms is in talks to raise $10 million in a bridge round which is being led by Investcorp and Peak XV Partners (formerly Sequoia Capital India), both of which are its existing investors. The Gurugram-based company is raising money at an unchanged valuation of around $205 million, people in the know told Moneycontrol.

Wingreens has also spoken with a few family offices who are likely to infuse some capital in the ongoing round but negotiations are still underway, the people cited above added. The mayonnaise maker will use these funds to meet its working capital requirements.

Founders of the company, Anju Srivastava and her husband Arjun Srivastava confirmed the developments to Moneycontrol but did not comment on the size of the deal.

“We have already signed a term sheet with Investcorp and Peak XV but we are also engaging with a few family offices to see if they would be interested to participate in the same round before closing the deal,” Anju Srivastava, co-founder and CEO, Wingreens, said.

Wingreens closed FY22 with a revenue of around Rs 200-210 crore, which doubled from Rs 101 crore in FY21 data on Tracxn, a private markets information provider, showed. The company’s losses however increased from Rs 12 crore to Rs 54 crore during the same period.

“We now need working capital to grow and move forward. Last year because the funding environment was ebullient we were growing our topline but this year the market is much tighter, so we need to focus on our bottomline for which we will need a bridge round so we can tide through these times,” Srivastava added.

Her comments come at a time when the company’s revenues grew around 30 percent YoY to about Rs 275 crore in FY23 but its losses widened at a much faster pace of around 55 percent to reach roughly Rs 80-90 crore, a person with knowledge of the company’s financials told Moneycontrol.

While the company did not comment on its performance, Srivastava said the company would be EBITDA positive within the next three months but company-wide profitability, or net profitability, was still a few years out primarily because of Wingreens’ fixed costs.

Wingreens – which offers a range of dips and spreads – has a gross margin of around 52 to 55 percent.

As the company puts itself on a path towards profitability, it has scaled back its D2C ambitions, discontinued some stock keeping units (SKUs), including its brand The Impatient Baker, and others which were not yielding desired results for the company. Wingreens – which gets 35 percent of its sales from e-commerce and quick-commerce channels – will now increase its focus on B2B which will give it scale.

The opening up of another revenue stream was particularly important because Wingreens was now facing competition from giants like Hindustan Unilever Limited (HUL) which introduced Hellmann’s mayonnaise in India more recently and took away market share from Srivastava’s company.

For Wingreens, the increased competition was coupled with a slower growth rate.

“We were earlier growing at around 10-20 percent month-on-month and want to put ourselves back on that trajectory – right now we are only holding steady,” Srivastava concluded.

So far, Wingreens has already raised around $46 million from Omidyar Network India, Zurich-based responsAbility Investments AG, Investcorp, Peak XV and others.