Hangyo, a popular ice cream brand in South India, has raised $25 million (around Rs 200 crore) from Faering Capital, marking its largest institutional round in over 20 years. This funding will help the Mangaluru-based company to enhance its production capabilities, accelerate new product development, and expand its presence across key markets, primarily in southern India.
About Hangyo
Hangyo Ice Cream was founded in 2003 by Pradeep Pai and Dinesh Pai. The company offers a suite of products in various flavors and formats, including cups, cones, sorbets, sticks, tubs, and kulfis, distributed through general trade, modern trade, and online channels. Currently, online sales account for less than 2% of its overall sales.
Manufacturing Facilities
Hangyo operates two manufacturing facilities in Karnataka, collectively producing 120,000 liters of ice cream daily.
Market Share
India’s ice cream industry, estimated to be worth about $5 billion this year, has seen a surge of new-age brands over the past few years. Emerging players such as Noto, Get-A-Way, Go Zero, Frubon, and Minus 30 are vying for market share in a sector traditionally dominated by legacy brands such as Amul, Mother Dairy, Hindustan Unilever’s Kwality Walls, and Jaipuria group’s Cream Bell.
Faering Capital
Faering Capital, a private equity firm, has invested in Hangyo Ice Cream, holding a 24% equity stake in the company. Sameer Shroff, managing director of Faering Capital, said, “Hangyo Ice Cream is a fast-growing and profitable consumer company that has consistently delivered high-quality products driven by state-of-the-art manufacturing, wide distribution, and strong customer love.”
Growth Plans
Hangyo plans to use the fresh capital to enhance its production capabilities, accelerate new product development, extend its presence across key markets, primarily in southern India, and invest in advertising. The company aims to reach a revenue of Rs 700 crore within the next four years.
Industry Trends
The fundraising comes at a time when new-age ice cream brands are increasingly attracting venture capital investments. Ahmedabad-based Hocco Ice Cream had raised Rs 100 crore ($12 million) in a round led by its promoter group, the Chona family, along with existing investor Sauce VC. Similarly, Go Zero secured $1.5 million from its existing investors, including DSG Consumer Partners, Saama Capital, and V3 Investors.
Financial Performance
Hangyo Ice Cream earned revenue of Rs 300 crore in 2023-24 and plans to reach Rs 700 crore within the next four years. Almost half of its total turnover comes from Karnataka.
Strategic Advisor
Ullas Kamath, Founder at UK&Co, a strategic advisor and shareholder in Hangyo, noted, “We see immense market potential in the ice cream industry, especially with the increase in Indian consumer spending.”
Financial Advisor
Axis Capital served as the exclusive financial advisor to Hangyo Ice Cream.
Conclusion
Hangyo Ice Cream, a popular South Indian brand, has successfully raised $25 million from Faering Capital, marking its largest institutional round in over 20 years. This significant funding will enable the company to enhance its production capabilities, accelerate new product development, and expand its presence across key markets in southern India. With a strong presence in several states and a production capacity of 1.2 lakh liters a day, Hangyo is poised for growth and market leadership in the Indian ice cream industry.
FAQ’s
- Q: What is Hangyo ice cream brand? A: Hangyo is a popular South Indian ice cream brand founded in 2003 by Pradeep Pai and Dinesh Pai.
- Q: How much funding did Hangyo receive from Faering Capital? A: Hangyo received $25 million (around Rs 200 crore) from Faering Capital.
- Q: What will Hangyo use the funding for? A: Hangyo will use the funding to enhance its production capabilities, accelerate new product development, and expand its presence across key markets in southern India.
- Q: What is Hangyo’s current revenue? A: Hangyo earned revenue of Rs 300 crore in 2023-24.
- Q: What is Hangyo’s growth target? A: Hangyo aims to reach a revenue of Rs 700 crore within the next four years.
- Q: Who is the strategic advisor to Hangyo? A: Ullas Kamath, Founder at UK&Co, is the strategic advisor and shareholder in Hangyo.
- Q: Who served as the exclusive financial advisor to Hangyo? A: Axis Capital served as the exclusive financial advisor to Hangyo Ice Cream.
