Rebel Foods explores stake sale in premium chocolate brand Smoor

Cloud kitchen operator Rebel Foods, which owns brands such as Faasos and Behrouz Biryani, has held discussions to sell its stake in premium chocolate and dessert maker Smoor, said people briefed on the matter.

In a related move aimed at restructuring operations, Rebel Foods has closed its offices in Gurugram and Bengaluru.

One of the persons said Rebel Foods, which owns around 57% of Smoor, has been looking for a buyer but those talks have yet to fructify.


The people cited above said Smoor’s business has lagged expectations, particularly in key markets like Mumbai and with Rebel Foods preparing for a potential public listing, there is growing pressure to offload underperforming brands.

Responding to ET’s queries, a Rebel Foods spokesperson said the company continues to back Smoor and has been investing in its long-term growth.

“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 said.

On closing its offices, the spokesperson said, “Our decision to consolidate teams in Mumbai is a strategic step towards deeper collaboration and faster decision-making as we enter the next phase of growth”.

Rebel Foods had acquired a majority stake in Smoor in April 2022, valuing the brand at over $50 million. The acquisition was part of a broader strategy to evolve into a full-fledged brand aggregator in the food and beverages (F&B) space and invest up to $150 million to acquire and invest in brands , but the company did not comment on how much of that amount has been deployed.

At the time, Rebel said Smoor aims to grow threefold in FY23, and touch $100 million in annual revenue by 2026.

In FY24, Smoor reported a 16% increase in revenue at Rs 149 crore, showed financials sourced from Tracxn. The brand however continued to face increased losses. It reported a net loss of Rs 19 crore in FY24, widening from Rs 17 crore in fiscal 2023 and Rs 10 crore in FY22.

Overall, Rebel Foods, which closed a $210 million funding round led by Singapore’s sovereign fund Temasek at a flat valuation in December, improved its financial health in FY24 though it continued to incur losses.

According to Registrar of Companies (RoC) filings, the Mumbai-based company’s net loss contracted 42% to Rs 378 crore in FY24 while revenue increased 19% to Rs 1,420 crore.

The latest moves indicate Rebel’s attempt to streamline operations and sharpen its focus ahead of a possible market debut, even as questions linger about the performance of some of its premium bets, one of the persons said.

Rebel Foods’ rival Binny Bansal-backed Curefoods last month filed draft papers for its proposed Rs 800 crore initial public offering (IPO). Curefoods, the operator of brands such as EatFit, Sharief Bhai Biryani, Nomad Pizza and Krispy Kreme, is the second largest internet-first cloud kitchen company after Rebel Foods.

In a LinkedIn post on Sunday, Rebel Foods founder and CEO Jaydeep Barman wrote that the company is planning to acquire, invest in or partner with restaurant brands that have achieved a “minimum scale”.