Lightbox leads $20m round for India QSR chain

Existing investor Sequoia Capital also took part in the round which, according to The Economic Times, comprises $16 million in equity and $4 million in debt. The investment comes more than three years after Sequoia committed $5 million to the company via a Series A round.

Set up in 2011 by Jaydeep Barman and Kallol Banerjee, the start-up already has 90 outlets across six cities: Pune, Mumbai, Bangalore, Chennai, Ahmedabad, and Baroda. The business model differs from standard QSR chains in that it is supported by an app-based food delivery service. Faaso's claims that 65% of its business is online, with the app processing some 50,000 orders a month from 100,000 active users.

The new funding will be used to expand into 10 new cities over the next 12 months. The start-up is also targeting INR1 billion ($16 million) in revenue by March next year, with the expectation that it will break even by early 2018, by which point revenue will have reached INR4.5 billion.

"Just as Flipkart was able to become the largest retailer in India over the last 5-6 years, we think Faaso's can do the same in the food business," said Prashant Mehta, a partner at Lightbox Ventures.

Lightbox was formed last year when Kleiner Perkins Caufield & Byers (KPCB) and Ram Shriramled's Sherpalo Ventures decided to end their India joint venture. The team's first fund was used to buy a portfolio of six existing investments while a second fund - comprising capital for fresh deals - closed at $100 million.

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