In what could be called a landmark exercise in funding for the Indian ice cream industry, Hangyo, a flagship brand for ice creams, has successfully managed to raise $25 million (approximately Rs 200 crore) from Faering Capital. This will have the potential to become one of the largest funding rounds in India for an ice cream brand and shows the growing interest in the sector and, alternatively, Hangyo’s potential in the sector.
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Strategic Investment for Growth
The newly acquired capital is set to ramp its up strategic plans for enhancing production capabilities, gearing new product development, and expanding market presence, particularly in South India. This investment accelerates Hangyo’s forces in key markets, ensuring an outreach to a broader scope and improved service delivery to its consumers.
Company Background and Market Presence
Established in 2003 by entrepreneurs Pradeep Pai and Dinesh Pai, Hangyo has managed over the years to penetrate the Indian ice cream market well. The company’s product offering range from cups, cones, sorbets to sticks, ice-creams, tubs, and kulfis. These are available through two channels: general trade, modern trade, and recently online platforms, including quick commerce apps.
Hangyo is present in a significant way in several states, such as Karnataka, Tamil Nadu, Kerala, Goa, Andhra Pradesh, Telangana and Maharashtra. The pod name has more than 350 distributors and over 30,000 retail footprints, with the company claiming to have served more than 3 million consumers till February this year.
Performance and industry context
Though Hangyo has not yet filed its annual financial statements for FY23 and FY24, revenue from operations in FY22 zoomed by a whopping 50% to Rs 233 crore. Profits more than multiplied nine times to hit Rs 5.8 crore in FY22, underlining that the company has been in a very strong financial position and growth path.
The investment from Faering Capital has come even as several other ice-cream brands in India too have received substantial investments. Since May 2023, brands like Hocco, Go Zero, and NIC have all raised significant sums, including $12 million by Hocco from members of the Chona family and others and NIC, another icecream brand from India, which raised $31 million across two rounds. Go Zero also raised $2.5 million through two rounds of funding.
Historical Funding and Future Prospects
This new round of funding for the company, after more than a decade from its last major investment into Hangyo, comes at a time when the brand had last raised $5 million from Capvent Partners in August 2013. The current round also reflects a wider trend in the industry, with later-stage food companies increasingly seeking external funding to fuel their continued growth and innovation.
The infusion of the capital makes Hangyo very well set to create a burst in its competitive edge within the dynamically evolving ice cream market. An innovation-led and expansion-focused company, sticking to aspirations to be among the segment leaders with an ever-growing consumer base for high-quality and diversified ice cream-based products, underpins the long-term vision of the company.
With this, securing the funds through Faering Capital, Hangyo Ice Creams steps up on the ladder of growth. The innovation would for sure leave a mark on the ice cream industry of India in this growth phase of the company, meanwhile setting up new benchmarks in delivering the best quality and delighting the customers.
