Hangyo Ice Cream Achieves Major Funding Milestone
Hangyo Ice Cream has successfully achieved the title of India’s largest venture funding in the ice cream sector, securing $25 million from Faering Capital in August of the previous year. This significant investment reflects the company’s impressive growth trajectory, as it crossed Rs 300 crore in revenue during fiscal year 2024 while still being profitable.
Revenue Growth for Hangyo Ice Cream
Hangyo’s operational revenue rose by 23.5% compared to the previous year, reaching Rs 294 crore in FY24 from Rs 238 crore in FY23, as indicated by its consolidated financial statements obtained from the Registrar of Companies.
Company Background and Product Offering
Founded in 2003 by Pradeep Pai and Dinesh Pai, Hangyo provides a variety of products including cups, cones, sorbets, stick ice creams, tubs, and kulfis through various channels like general trade, modern trade, and online platforms, including quick commerce apps. In FY24, the sole revenue for Hangyo was generated from ice cream sales.
Cost Structure Analysis
For the ice cream business, procurement costs represented the largest expense, constituting 57% of total expenditure. In FY24, these costs increased by 9.1% to Rs 168 crore. Additionally, employee benefits experienced a notable rise of 38.9%, amounting to Rs 25 crore in the same fiscal year.
Total Expenditure Breakdown
Increased expenses related to energy, advertising, transportation/distribution, travel, and other overhead costs pushed the total expenditure up by 23.5%, reaching Rs 294 crore in FY24, compared to Rs 238 crore in FY23.
Profitability and Financial Performance
The combination of substantial scale and managed costs enabled Hangyo to achieve a 2.1X increase in profits, amounting to Rs 11.8 crore in FY24, in contrast to Rs 5.6 crore in FY23. Importantly, the company spent Rs 0.95 to earn one rupee, with improvements in ROCE and EBITDA margins to 28.77% and 11.86%, respectively. By the close of FY24, Hangyo’s total current assets reached Rs 59 crore.
Investment History
To date, Hangyo has raised a cumulative total of $30 million, which includes a prior investment of $5 million from Capvent Partners in 2013.
Competitive Landscape and Recent Funding Trends
In the past two years, numerous emerging and established ice cream brands, such as Hocco, Go Zero, and NIC, have also attracted considerable funding. Hocco secured $12 million from the Chona family and others, while NIC garnered $31 million across two funding rounds. Additionally, Mumbai-based Go Zero raised $2.5 million through two separate funding rounds.
