Charcoal Eats Bags Rs 45 cr, Plans Major Expansion in the QSR Segment
Charcoal Eats Bags Rs 45 cr, Plans Major Expansion in the QSR Segment

Charcoal Eats, a quick service restaurant (QSR) chain specializing in Indian cuisine, has secured Rs 45 crore in funding from investors led by Paras Pharma founder Girish Patel, among others. This investment values the company at an estimated Rs 200-250 crore. Additional investors include Anil Sanghvi, chairman of Sanghvi Erectors, Ajinkya Firodia, MD of Kinetic Group, and former banker Rajiv Jain.

Founded nine years ago, Charcoal Eats operates 40 locations, primarily cloud kitchens in Mumbai, Pune, and Delhi-NCR, competing in the Rs 6,000 crore biryani market with brands like Biryani by Kilo and Behrouz Biryani. Despite being the most ordered dish on Swiggy and Zomato for several years, the biryani market remains fragmented and unorganized.

"The capital will be used for distribution expansion, brand building, technology, and international expansions. The funds will help widen our reach to over 100 multi-format stores in the current fiscal, as well as expand globally, especially in the US," said Charcoal Eats co-founder Krishnakant Thakur. The company did not comment on the specific deal size.

Charcoal Eats was founded in 2015 by Krishnakant Thakur and Anurag Mehrotra, both former finance executives. The company operates two brands—Charcoal Eats for biryani and B Burger in the gourmet burger segment. Mehrotra has held leadership roles at Edelweiss Capital, Kotak, and Quant Capital, and also seeded Coverfox Insurance Broking. Thakur has a background in financial services as a research analyst.

The company aims to achieve an annualized run rate of Rs 150 crore by the end of the fiscal year and reach break-even. "We expect revenues to grow five times over the next two years fueled by brand building, expansion in cloud kitchens, and various other formats like corporate parks and international markets. A capex and opex-light model helps the company achieve exponential growth in a very capital-efficient manner," Thakur added.

The organized foodservice market was valued at $27.1 billion in 2023, with the chained category projected to grow at a CAGR of 12 percent between 2020 and 2026, driven by increased penetration and growth from non-metro cities, according to Wazir Advisors. The QSR segment remains the fastest-growing category in the organized sector, with an expected growth rate of 18 percent during 2023-26 as urbanization and modern lifestyles continue to expand in India.

Nitin Mathur, Founder of Tavaga and an early investor in Charcoal Eats said, "Consumer behavior is changing rapidly and putting pressure on companies to be more agile, as seen in the recent shift to quick commerce. Challenger brands like Charcoal Eats are rightly placed on the cusp of these mega consumer trends. This highlights how rapid changes challenge big companies, while new, innovative brands can quickly adapt and potentially create new market categories."

Last year, competitor Biryani By Kilo (BBK) raised $35 million in its series B funding round led by Falcon Edge venture capital arm Alpha Wave Ventures, while Rebel Foods, owner of Behrouz Biryani, secured $13.2 million in debt from Alteria and InnoVen Capital.

"This milestone is a testament to the unwavering grit and resilience of founding entrepreneurs, who have navigated the challenges of the pandemic with remarkable tenacity and vision. Their leadership continues to drive the commitment towards operational excellence and customer delight in the QSR landscape," said Girish Patel.

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