Rebel Foods looks to exit Smoor, closes offices amid restructuring

New Delhi: Cloud kitchen operator Rebel Foods is reportedly in discussions to sell its majority stake in premium chocolate and dessert brand Smoor. The company, which owns a 57% stake in Smoor, is said to be seeking a buyer as part of a wider operational restructuring, according to a report. However, the talks are yet to reach a conclusion.

As part of its internal changes, Rebel Foods has shut its offices in Gurugram and Bengaluru. The company said it is consolidating teams in Mumbai “as a strategic step towards deeper collaboration and faster decision-making” in preparation for the next phase of growth.

Rebel Foods, the parent company of brands such as Faasos and Behrouz Biryani, acquired the majority stake in Smoor in April 2022, valuing the brand at over $50 million. The move had been part of a broader ambition to invest in and aggregate food and beverage brands. At the time, the company announced plans to invest up to $150 million in this strategy, although it has not disclosed how much has been deployed so far.

Smoor was expected to triple its revenue in FY23 and reach an annual revenue of $100 million by 2026. However, according to financial data from Tracxn, the company reported Rs 149 crore in revenue in FY24, marking a 16% increase year-on-year. Its net losses widened to Rs 19 crore in the same period, compared to Rs 17 crore in FY23 and Rs 10 crore in FY22.

According to an ET report, a Rebel Foods spokesperson stated, “Over the past six months, we have made significant long-term investments in Smoor, including the commissioning of a new state-of-the-art manufacturing facility.” The spokesperson also reiterated the company’s ongoing support for the brand.

While Smoor continues to underperform in certain markets such as Mumbai, Rebel Foods appears to be refining its portfolio ahead of a potential public listing. In FY24, Rebel Foods itself saw revenue grow 19% to Rs 1,420 crore, while net losses narrowed by 42% to Rs 378 crore, according to filings with the Registrar of Companies.

The company’s restructuring comes at a time when industry competitors are also preparing for market entry. Curefoods, backed by Binny Bansal and the operator of EatFit and other brands, recently filed draft papers for a Rs 800 crore IPO. It is considered the second-largest internet-first cloud kitchen company after Rebel Foods.

In a recent LinkedIn post, Rebel Foods founder and CEO Jaydeep Barman said the company will continue to look at acquiring, investing in or partnering with restaurant brands that have achieved a “minimum scale”.