Mumbai-based D2C fresh food delivery startup Fraazo raises $11 Million in series A round

Online fruit and vegetable delivery startup Fraazo, on July 2, 2021, raised $11 million in Series A funding led by Sixth Sense Ventures and NABARD backed NABVENTURES. It attempts to scale the movement ‘pan-India’. Current investors Equanimity Ventures, Asian Paints Limited’s Manish Choksi, Vice and Apar Group were also witnessed in the round.

The startup has also welcomed interest from developing finance institutions and multilateral companies for an added $5 million of funding for improving its procurement area with the North-northeastern farmers in India, said in a statement. The investment round is a mix of equity and debt, the startup said.

The venture enables the startup, which currently works only in the Mumbai market, to expand to other metropolitan cities and invest in technology.

Company’s Profile 

Founded in 2020 by Atul Kumar, Vikas Dosala, Sumit Rai, and Aashish Krishnatre, Fraazo follows a farm-to-fork design that owns the entire back-end supply series with farmers. The startup is looking to accelerate operations pan-India while drawing in on the unprecedented digital adoption within the fresh food industry.

Fraazo distributes farm-fresh vegetables and fruits over Mumbai within 60 minutes through a system of micro-fulfilment stores. Started 12 months ago, it has attended to a million customers till date, the company stated.

Purpose of Investment

Aiming at 1,000 centres across the country, it intends to develop the capability to deliver fresh products to a customer’s door within 15 minutes of ordering.

The over-$300 billion fruits and vegetable industry is witnessing an increasing variation towards digital, with the online grocery share growing at a 50% compounded annual growth rate, pushed even further by the pandemic.

“The essentiality for hygiene, digital convenience, and customer service has never been higher, particularly with quality inequity and differences in service levels across traditional carriers,” said Kumar, the chief executive of Fraazo.

What the Investors has to say

Founder and CEO, Sixth Sense Ventures, Nikhil Vora, said, “Fruits and vegetables, the biggest category in perishables, is fragmented, offline, with no MRP restrictions, nor GST—this, coupled with notable supply-chain moat and high order frequency, makes it an extremely scalable online opportunity,”. Supply-chain verticalization is crucial for perishables, which is where horizontal grocery pros have observed it as challenging, and Fraazo has been able to mark this, he added.

“The D2C fresh food business is one of the most challenging and nascent areas in India with confined penetration by horizontal D2C players,” said Gills John, vice president, Nabventures.

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