Indian F&B procurement startup BazaarNXT bags seed funding

BazaarNXT, a Bengaluru-based procurement startup focusing on restaurants, said it has raised US$450,000 in seed funding from angel investors in Singapore and India.

Investors in the funding round include SureCash chief financial officer Suresh Mahadevan, GrabFood director of business development and partnerships Saad Ahmed, ZenRooms co-founder Kiren Tanna, Delhivery exec Suresh Kumili, Finablr’s Shubhrendu Koche, and Stripe’s Vidit Agrawal.

The BazaarNXT team / Photo credit: BazaarNXT

“We need the money to invest in technology and to build our sales and operations,” BazaarNXT co-founder and CEO Dhananjaya S told Tech in Asia, adding that the company is also planning to help manufacture certain packaging items.

Founded in January 2017, BazaarNXT connects restaurants with entrepreneurs selling packaging equipment. Its platform offers meal containers, trays, and bags as well as some kitchen essentials, among other things.

According to Dhananjaya, the startup sold 1.1 million food packaging containers and over 1.4 tonnes of paper products between February to December 2019.

Most of the company’s customers are based in the southern cities of Bangalore and Hyderabad, but it also supplies to six other cities in India. It has catered to more than 3,500 retail restaurants, delivering more than 9,300 orders since March 2019, according to a report by YourStory.

The company expects its sales to grow by 30% month on month, with the annual run rate forecast to reach US$6 million by March, Dhananjaya said.

BazaarNXT said it doesn’t charge restaurants any fees. However, it charges a flat fee to vendors who are exclusively collaborating with the startup.

India’s packaging industry is expected to grow at a compounded annual growth rate of 20% to US$72.6 billion by the end of March 2020, according to a study by Indian industry body ASSOCHAM and consultancy services firm EY India. About 10% of that is expected to be spent by hotels, said Dhananjaya.

As it capitalizes on the burgeoning opportunity, BazaarNXT looks to raise US$5.4 million in series A funding before April this year, the head exec said.

It’s up against local rivals such as Zomato-backed HyperPure, AdUrCup, Pacfo, and Bizongo, which just raised US$30 million in series C funding to expand into other categories like pharma packaging.