NEW DELHI, Aug 20
After cracking the online market, meat and seafood direct-to-consumer (D2C) unicorn Licious is now focusing on offline expansion. The company is looking to open 25 offline stores by the end of FY25, mostly in Bengaluru.
“Once this model settles well and we figure out profitability, we will dial up roughly 70 to 100 stores every year,” co-founders Vivek Gupta and Abhay Hanjura told FE.
The startup currently has one offline store and will be opening the second store by the end of this month, both in Bengaluru. Besides these meat stores, where consumers can get customised meat and seafood, the startup has also been experimenting with experience stores or zones across Bengaluru, that sell food.
However, given the current response, the firm will continue to focus on the meat store format, over experience stores.
As of today, over 80% of Licious’ sales happen on its company-owned D2C channel and the rest from marketplaces and quick commerce platforms. It also claims to get 90% of its business from repeat customers.
The startup believes that for the next few years, online will continue to be dominant and the largest channel, but in around five years offline will be a meaningful play.
“For us, offline is a way to be omnichannel. The future in this category is omnichannel. For instance, there are still certain categories and certain ethnicities that would want to go to the final point of purchase. However, once trust is built, they may also move online. I believe at some point, online and offline will be reasonably harmonious,” Hanjura said.
For offline, the company wants first to get a steady foothold in Bengaluru and then move to Chennai or Mumbai. “The objective to do offline is not to do very fast. We want to do it slow and steady and ride on consumer experience,” Gupta added.
As part of its offline expansion plan, the startup is also looking at acquisitions in the offline meat space. “We are talking to a few smaller chains which exist in few cities and have opened 10 to 18 stores, but don’t have the capital to expand. If these stores are doing reasonably good, we may look at acquiring them. We are having a few conversations, but nothing has materialised so far,” Gupta added.
Interestingly, the startup’s original plan, when it was founded in 2015, was to go offline. “Licious on day one, wanted to start as an offline company, but offline needs capex, store building etc. So, in our early journey, we realised that online was the way to go,” Gupta said. He added that in the last nine years offline market has not gone anywhere and they are more prepared to do it.
Today, as the firm targets profitability and further scale, offline has become a key focus area. The company’s current annual run rate (ARR) as of June 2024 is Rs 950 crore, a 22% (approx) increase from an ARR of Rs 770 crore in June 2023. It aims to touch an ARR of Rs 1,200 crore by March 2025. It is also targeting Ebitda profitability by the end of FY25.
Besides offline, the startup is also betting on a subscription-driven model, Infiniti. Introduced ten months ago, the members get benefits like free delivery and cashback. As of today, the loyalty programme, as the company calls it, has amassed 225,000 active members, contributing to nearly 50% of monthly revenue. The subscription model is also seeing a monthly retention of over 70%.
Licious is backed by Temasek, Multiples, 3one4 Capital, Mayfield India, Bertelsmann, Vertex, and others. It last raised funding, $150 million, in March 2022, in an extended Series F round led by Singapore-based Amansa Capital. In October 2021, it raised $52 million from IIFL AMC’s Private Equity Fund and turned a unicorn.
