Existing investors Sixth Sense Ventures, Equanimity Investments, Apar Group participated in the fundraising, as did some family offices including Manish Choksi of Asian Paints.
The fresh foods category has undergone significant changes in the last couple of years, with established players such as Grofers and BigBasket raising the stakes and challengers such as Fraazo fighting for a share of the pie.
“We believe it has the potential to be a $300-$400 billion category and it is a three-to-four player market with room for everyone to grow,” Atul Kumar, cofounder and chief executive of Fraazo, told ET.
According to Kumar, the current funding round is a mix of equity and debt and gives the firm a runway of another 12-18 months. “We plan to enter newer geographies using this capital,” he said.
The new funding round comes two months after the company raised $15 million in its Series A round, led by Sixth Sense Ventures. “We’ve grown almost six times in terms of the number of orders in the last six months. We currently serve around half-a-million orders a month,” Kumar said, adding that in the next 12-18 months, the company expects to reach 10 million monthly orders.
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Fraazo aims to create a network of more than 500 dark stores across the top 15 cities. Currently, it operates in Mumbai and Hyderabad.
Founded in 2019 by Kumar, Vikas Dosala, Sumit Rai, and Aashish Krishnatre, Fraazo owns the integrated supply chain for fresh produce, enabling swift movement, ensuring timely deliveries and reducing food wastage.
“We are impressed by Fraazo’s exceptional growth in a large market such as Mumbai. With the convenience of quick home delivery and a business model that befits rapid scale-up, we’re excited to partner with Fraazo as they extend their proposition to customers across India,” said Sandeep Singhal, cofounder and managing director of WestBridge Capital.
The company started off by delivering orders within 90 minutes. That has now come down to 15-30 minutes. “Faster delivery is becoming a hygiene factor where everyone is offering that. We now want to compete on the quality of the product and the customer experience,” Kumar said.
The company, like many of its peers, sources products directly from farmers.
“The online grocery segment (fruits and vegetables) is waiting to get disrupted and consolidated from the millions of offline retailers,” said Nikhil Vora, founder and CEO of Sixth Sense Ventures.
Fraazo plans to enter newer categories including dairy products such as paneer, curd, flavoured milk, as well as the ready-to-cook segment, Kumar said.
“Fraazo presents an innovative business model providing a solution for a large and unorganised market being addressed by a pedigreed team with complementary skill sets,” said Rajesh Sehgal, managing partner at Equanimity Investment.
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