Mithai Shops Attract VCs, PhonePe Leads, and Rapido’s Ownly

India’s traditional sweets and snacks market has long been the stronghold of family-run businesses, with empires being forged one loyal customer at a time. These were operations steeped in tradition, guarded recipes, and regional pride. They didn’t need venture capital to grow; they relied on word-of-mouth, generational trust, and steady profits. Today, they’re still profitable - sometimes shockingly so. Haldiram’s, for instance, made about ₹1,400 crore in after-tax profit in FY24 on revenues of ₹12,800 crore, with margins that many new-age startups can only dream about. The wider industry still throws up margins of 10–30%, driven by low customer acquisition costs, high repeat business, and efficient supply chains. Yet the picture is changing. These legacy brands are now being courted by private equity and venture investors, with the latest example being A91 Partners’ ₹175 crore investment in Coimbatore-based Shree Anandhaas Sweets.

Anandhaas isn’t a sleepy corner-shop mithaiwala. Since pivoting fully into sweets and snacks retail in 2017, the brand has grown into 19 outlets generating ₹290 crore in revenue in FY25 - an average of ₹15 crore per store, signalling extraordinary productivity. This is its first institutional funding round, reportedly valuing the company at ₹1,000-1,200 crore. For A91, which has a track record of backing category-leading F&B brands like Paper Boat, Blue Tokai, and Happilo, Anandhaas fits a familiar thesis: founder-led, profitable, regionally dominant, and ready to scale. The investment will fund expansion deeper into Tamil Nadu and into neighbouring Kerala and Andhra Pradesh, markets where the brand’s hybrid model - restaurants combined with exclusive sweets and snacks outlets - could replicate its Coimbatore success.

This isn’t an isolated deal. Over the past few years, we’ve seen Motilal Oswal take a stake in Lal Sweets, Temasek buy into Haldiram, and ChrysCapital acquire Theobroma. The catalyst is a perfect alignment of needs. For founders, outside capital means breaking free of geographical constraints, professionalising management, and accelerating store openings without mortgaging the family legacy. For investors, it’s a chance to buy into high-margin, high-loyalty businesses with decades of proof, at a time when tech-heavy portfolios have been battered by valuation corrections. The sector’s growth story is compelling: India’s snacks market was worth ₹46,500 crore ($5.3 billion) in 2024 and is projected to double by 2033, growing at around 8.6% CAGR. The formalisation of the sector - spurred by GST, changing consumer hygiene expectations, and the pandemic - has made these businesses more transparent and scalable, ticking the governance boxes VCs look for.

Consumer behaviour has also shifted. Millennials and Gen Z may love global brands, but they’re equally enthusiastic about culturally rooted tastes - provided they come in hygienic, well-packaged, and conveniently available formats. Quick-commerce platforms have put traditional sweets and snacks one tap away, and digital marketing has given even regional brands national visibility. This creates a market where old traditions and modern ideas work together and make each other stronger.

A91’s bet on Anandhaas comes with another layer: diversification. Venture funds that were once overweight on SaaS, fintech, and consumer tech are now deliberately spreading exposure into offline, traditional sectors. Partly it’s risk management, partly it’s about accessing growth in places untouched by the funding winter. And unlike early-stage tech bets, where profitability is a distant promise, sweets and snacks brands start with the fundamentals - cash flows, loyal customers, and a category that grows in good times and bad. In Anandhaas’s case, its ability to outcompete older rivals in customer popularity in Coimbatore hints at brand-building chops that could travel across South India.

The question now is how far and how fast Anandhaas can scale without losing the essence that made it beloved in the first place. That’s the tightrope every family-run brand walks after taking institutional money: preserving authenticity while delivering the growth that investors expect. But if the recent wave of PE and VC deals is any indication, India’s mithai and snacks sector may be entering its most dynamic chapter yet, one where a rasgulla can be as much an asset-class bet as a sugar fix.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“I’m The Best”: PhonePe Continues To Lead UPI Race In July, Market Share Sees Marginal Decline

PhonePe kept its crown in the UPI kingdom this July, clocking 893 Cr transactions, nearly half of India’s total digital payments.

Google Pay trailed in second with 692 Cr swipes and taps, while the nation collectively set a new record at 19.47 Bn transactions. Still, PhonePe’s market share dipped ever so slightly, proving even kings have to watch their thrones.

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“Picture Abhi Baaki Hai Mere Dost”: ALLEN Digital CEO Abha Maheshwari Resigns

After a two-year stint steering ALLEN Digital’s online push, CEO Abha Maheshwari has called it a day. The former Meta exec was brought in to supercharge the edtech arm’s Bengaluru tech hub and digital-first programmes.

Now, with the helm vacant, ALLEN’s next chapter in the digital race is waiting to be scripted.

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“Kaante Ki Takkar”: Rapido rolls out food delivery app Ownly in selected areas of Bengaluru

Rapido is taking a bite out of Bengaluru’s food scene with its new delivery app, Ownly, now serving areas like Koramangala, BTM Layout, and HSR.

The twist is in form of a commission-free model that lets restaurants keep more and customers pay less. It’s an appetizing challenge to Zomato and Swiggy’s long-standing dominance.

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1. Aditya Birla’s digital-first roll-up platform TMRW is set to raise INR 437 Cr in external funding, tapping ServiceNow’s AI-powered PaaS to boost operations. The move comes as TMRW reports a 38% YoY revenue jump in Q1 FY26, despite widening EBITDA losses.
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2. Shivalik Small Finance Bank has secured Rs 100 Cr in fresh equity led by SMBC Asia Rising Fund, with backing from existing investors. The funds will fuel tech upgrades, talent expansion, and growth of its BaaS platform to better serve India’s underserved MSME and retail markets.
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3. Infra-tech player Shreetech has raised $4.5 Mn from Aarii Ventures and the Cello Family Office. The capital will boost its integrated operations spanning data centres, power infrastructure, and in-house equipment manufacturing.
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