Hangyo Ice Creams Secures $25 Million Investment from Faering Capital

Hangyo Ice Creams, a well-known brand in South India, has successfully raised $25 million (approximately Rs 200 crore) in its largest institutional funding round in over two decades. This investment comes from Faering Capital, a prominent private equity firm, and marks a significant milestone for the company as it seeks to scale its operations and expand its market presence. The investment is a clear indication of the growing interest among investors in backing consumer companies, particularly those in the food and beverage sector.

Strategic Use of Funds to Boost Growth and Expansion

The capital raised in this round will be strategically utilized by Hangyo Ice Creams to enhance its production capabilities, accelerate the development of new products, and expand its presence in key markets, particularly in South India. The company has established a strong foothold in Karnataka, Tamil Nadu, Kerala, Goa, Andhra Pradesh, Telangana, and Maharashtra. With over 350 distributors and more than 30,000 retail touchpoints, Hangyo aims to further consolidate its market leadership in these regions.

On August 22, Hangyo’s founder and managing director, Pradeep Pai, expressed his optimism about the partnership with Faering Capital. He emphasized that the investment not only brings substantial financial support but also provides the company with valuable strategic guidance. "The investment brings not only financial support but also a wealth of experience and strategic value to our company. This partnership will greatly enhance our expansion plans, driving growth and reinforcing our market leadership," Pai stated.

Hangyo’s Growth in the Competitive Ice Cream Market

Hangyo Ice Creams is now part of a growing list of ice cream brands that have successfully raised capital to scale their operations. Over recent months, brands like Hocco, Go Zero, and NIC have all secured funding to expand their customer base and boost their presence in the market. The quick commerce boom has played a pivotal role in this growth, making it easier for ice cream companies to reach customers through improved distribution channels and increased discoverability.

Hangyo’s product range includes a variety of offerings such as cups, cones, sorbets, stick ice creams, tubs, and kulfis, which are sold across general trade, modern trade, and online channels. The company currently has a combined production capacity of 1.2 lakh litres per day, enabling it to meet the growing demand for its products across its extensive distribution network.

Hangyo’s Journey: From Family-Owned Business to Industry Leader

Founded in 2003 by the Pai family, Hangyo Ice Creams has come a long way from its humble beginnings. The company previously raised around $5 million from a group of angel investors and other financial backers. Over the years, Hangyo has built a reputation for delivering high-quality products and has become a beloved brand among consumers in South India.

The recent investment from Faering Capital marks a new chapter in Hangyo’s journey, providing the company with the resources needed to scale its operations and explore new growth opportunities. Faering Capital’s involvement also underscores the confidence investors have in Hangyo’s ability to continue delivering exceptional products and maintaining its competitive edge in the market.

Faering Capital’s Investment Strategy and Portfolio

For Faering Capital, the investment in Hangyo Ice Creams is the first of 2024 and aligns with its strategy of backing high-growth consumer companies with strong brand equity. The homegrown private equity firm has raised around $720 million across three funds and has a diverse portfolio that includes companies such as cake brand Bakingo, lifestyle startup Nykaa, investment platform Smallcase, insurance company Go Digit, and snack manufacturer Prataap Snacks, among others.

Sameer Shroff, co-founder and managing director of Faering Capital, expressed his enthusiasm for the partnership with Hangyo Ice Creams. "Hangyo Ice Creams 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. Faering Capital is delighted to partner with Hangyo in their next stage of growth," Shroff said.

The Road Ahead for Hangyo Ice Creams

With the new infusion of capital, Hangyo Ice Creams is well-positioned to capitalize on emerging trends in the ice cream industry and further strengthen its market presence. The company’s focus on innovation, product development, and expanding its distribution network will be key drivers of its growth in the coming years.

As Hangyo embarks on this new phase of its journey, it remains committed to maintaining the high standards of quality and customer satisfaction that have been central to its success. The partnership with Faering Capital is expected to accelerate Hangyo’s growth trajectory, enabling the company to reach new heights in the competitive ice cream market.

In conclusion

Hangyo Ice Creams’ successful $25 million fundraise from Faering Capital marks a significant milestone in the company’s history. With strategic plans in place to enhance production, expand market presence, and develop new products, Hangyo is poised to continue its upward trajectory and solidify its position as a leading player in the Indian ice cream industry.