Reliance Pays INR 28 Crore to Acquire TagZ Foods

Nitin Konde, Varun Bhardwaj

Nov 15, 2024 — 3 min read

Reliance Acquires TagZ Foods for INR 28 Crore

For about INR 28 crore (about $3.5 million USD), Reliance Consumer Products, a division of Reliance Retail, purchased the direct-to-consumer (D2C) snack company TagZ Foods. This purchase, which some have referred to as a distress sale, is another example of a big company purchasing a smaller direct-to-consumer brand.

Founded in 2019 by Anish Basu Roy and Sagar Bhalotia, TagZ Foods sells a variety of foods, including cookies, gourmet dips, and popped potato chips. The business demonstrated a multi-channel strategy to sales by operating through its website, multiple e-commerce platforms, and physical retail locations. Following their appearance on the well-liked Indian television programme Shark Tank India, their items saw some increase in visibility.

Overall Funds Raised by TagZ Foods

According to the company's financial history, a total of roughly $3.2 million USD was raised across multiple funding rounds. This comprised a $1.2 million USD seed investment round from angel investors in 2020 and a $2 million USD pre-Series A round headed by 9 Unicorns. An undisclosed sum from former Indian cricket player Shikhar Dhawan, who also served as the company's brand ambassador, was contributed in later investment rounds. Additionally, Dexter Angels, Agility Ventures, Venture Catalysts, and Klub are investors in TagZ Foods.

But in the last few months, TagZ Foods has encountered many difficulties. According to media citations, the company stopped production a few months ago because it was having trouble growing. As a result, TagZ items were conspicuously absent from both online and physical retail locations. Many workers also left the company as a result of the production standstill.

According to regulatory documents, the ultimate acquisition price of INR 28 crore could alter after a due diligence procedure. Before publication, neither Reliance Consumer nor TagZ Foods responded to any media enquiries, despite many attempts to reach them for comment on this deal.

Financial Dynamics of TagZ Foods

In the fiscal year 2023 (FY23), TagZ Foods reported a net loss of INR 10.7 crore compared to INR 9.6 crore in operating revenue. This highlights the financial strain the business was under prior to the takeover. In a saturated market with well-known brands like Uncle Chips, Lays, Too Yumm, and BRB, the company faces competition.

This purchase fits with a broader pattern in the D2C industry in India. Due to difficulties faced by numerous smaller direct-to-consumer (D2C) brands, larger, more established Fast-Moving Consumer Goods (FMCG) companies have acquired them. For example, Hindustan Unilever purchased Oziva and Wellbeing Nutrition in 2022, while ITC purchased Yoga Bar in January 2023. These purchases demonstrate the consolidation taking place in India's quickly changing D2C market.

The continuous dynamic changes in the Indian D2C food industry are highlighted by Reliance Consumer Products' acquisition of TagZ Foods. The deal highlights the difficulties encountered by smaller D2C firms and the strategic prospects for larger corporations looking to diversify their product portfolios, even though the final terms are still up for approval. How Reliance incorporates TagZ Foods into its current business operations and if it can effectively turn around the brand's fortunes will be revealed in the future.