Sequoia Capital-backed craft beer company B9 Beverages that owns and sells the Bira 91 brand of beers has raised $50 million (Rs 332.6 crore) in a fresh round of funding from Brussels-based investment firm Sofina.
Sofina’s investment in Bira is the latest by the Belgian investment firm which has backed a number of leading Indian consumer and consumer technology ventures including online retail giant Flipkart, learning app Byju’s and Hector Beverages, which owns ethnic drinks brand Paper Boat.
The latest equity financing round is believed to have valued the three-year-old Bira at Rs 1,300- Rs 1,400 crore, sources briefed on the matter said. Chief Executive Ankur Jain, however, declined to comment on the issue when ET contacted him citing confidentiality clauses signed between the parties. “The proceeds will be used primarily for expansion of Bira’ distribution in the Indian market, though we have also set foot in key global markets such as the US and Asia Pacific region,” Jain told ET over the phone.
Bira 91, which sold 2.7 million cases of beer in the previous fiscal, is aiming to ramp up production capacity five fold over the next 18 months, Jain told ET. The New Delhi-headquartered company will look to manufacture 2 million cases per month.
“We are looking forward to partner with Bira 91 on a journey to scale their footprint in India and beyond. We have been impressed by the passion driving Bira 91's management team” Maxence Tombeur, Sofina’s head of Asia, said.
The estimated market for beer consumption in India is pegged at 320 million cases. Premium beer brands such as Budweiser, Kingfisher and Carlsberg account for 10% of the market, industry analysts say.
B9 has raised more than $100 million since its inception, making it amongst the top global beer-makers to have received significant amounts of equity funding, Jain told ET. The company currently sells five variants of its beer across seven states covering 15 cities in India. Its top selling cities include Bengaluru and Delhi.
It has also launched its brand in New York, New Jersey, Boston and Philadelphia in the US and is targeting launches in Singapore, Thailand, Malaysia, Vietnam and Hong Kong.
Over 90% of the capital raised will be used for domestic expansion, according to Jain. Sequoia Capital, which held a majority stake in Bira, also participated in the current round of funding. However, after the latest round of funding, the marquee investment firm’s stake will fall below 50%, post the closure of the transaction as its holding gets diluted.
Jain and the promoter group of B9 Beverages will own 30% of the company post this round while Sofina will own a 28% stake. Prior to the latest round of funding, the company had reportedly raised about $30 million in institutional capital, across multiple rounds.
B9 Beverages has manufacturing sites in Indore and Nagpur. These are not company-owned but leased and manufacture exclusively for the company. The company clocked sales of Rs 165 crore in the previous fiscal, and could turn operationally profitable in the current financial year.