Cloud kitchen unicorn Rebel Foods, the parent of brands like Faasos and Behrouz Biryani, is reportedly exploring a stake sale in premium chocolate and dessert brand Smoor, as part of a broader operational restructuring ahead of a potential IPO.
According to people familiar with the matter, Rebel Foods—holding around 57% stake in Smoor—is in early talks with potential buyers after the brand failed to meet performance expectations, especially in key markets like Mumbai. Discussions, however, are yet to yield a firm deal.
The possible divestment aligns with Rebel Foods’ ongoing consolidation efforts, including the recent closure of its offices in Gurugram and Bengaluru. Teams have been centralized in Mumbai to enhance collaboration and decision-making, the company stated.
“We continue to back Smoor and have made long-term investments including a new state-of-the-art manufacturing facility,” a Rebel Foods spokesperson told ET. The company acquired a majority stake in Smoor in April 2022 at a valuation of over $50 million as part of its strategy to evolve into a full-stack F&B brand aggregator. At the time, Rebel had committed up to $150 million to acquire or invest in promising food brands.
Despite these efforts, Smoor has struggled to achieve projected growth. While its FY24 revenue rose 16% to Rs. 149 crore, net losses widened to Rs. 19 crore from Rs 17 crore in FY23 and Rs 10 crore in FY22, according to data from Tracxn.
Rebel Foods itself improved its financial performance in FY24, narrowing losses by 42% to Rs. 378 crore while revenue climbed 19% to Rs. 1,420 crore. The company closed a $210 million funding round led by Temasek in December 2024 at a flat valuation.
The restructuring comes at a time when the cloud kitchen space is heating up, with rivals like Binny Bansal-backed Curefoods—which operates EatFit, Sharief Bhai Biryani, Nomad Pizza, and Krispy Kreme—filing draft papers for an Rs 800 crore IPO. Rebel Foods, India’s largest internet-first cloud kitchen brand, is believed to be preparing for a similar public listing.
Rebel co-founder and CEO Jaydeep Barman recently shared in a LinkedIn post that the company will continue to acquire or partner with restaurant brands that have achieved “minimum scale” as part of its growth roadmap.
As Rebel sharpens its focus on scalable, profitable assets, Smoor’s future within its portfolio remains uncertain, highlighting the challenges of building premium D2C food brands in a competitive and margin-sensitive market.