Decoding online meat retailer Zappfresh’s SME IPO and growth strategy

livemint.com:

Mint. Despite growth concerns in the sector, Zappfresh, a brand owned by DSM Fresh Foods Ltd, is aiming for a three to four-fold increase in revenue in the next three years, founder Deepanshu Manchanda said. How does it plan on doing that? By expanding its presence in the country and going overseas, setting up offline outlets, and through acquisitions.

The company, which started delivering meat online in 2015, has stayed relatively smaller than rivals Licious and Freshtohome. As its competitors work on building efficiency on top of growth, it will benefit companies that can pick up that growth and help Zappfresh build scale, according to Manchanda. The startup backed by investors including SIDBI Trustee Company Ltd, Amit Burman Family Office (through Gyan Enterprises) and AH Ventures, filed its Draft Red Herring Prospectus with the market regulator for listing on the SME platform of the BSE late last month.

The IPO will consist of a fresh sale of 5.9 million shares with a face value of ₹10. There is no offer-for-sale component. The company claims to be the first direct-to-consumer (D2C) food startup to be going public.

Zappfresh is the only profitable company in the space, with earnings before interest, taxes, depreciation and amortisation (EBITDA) of ₹9.58 crorein FY24. It posted an EBITDA of ₹3.4 crore in FY23. Revenue increased to ₹90 crore in FY24 from ₹56 crore in FY23.