CoCreate Ventures, a Bengaluru-based fund, has gained management control of Indulge Beverages, which makes the Bonhomia brand of tea and coffee capsules and machines.

The four-year-old start-up has a got a new lease of life after its promoters sold the assets to the new fund of CoCreate, which is focussed on turning around stressed assets of start-ups.

Suresh Narsimhan, Founder, CoCreate, said: “We are positioned as a buy out fund and our mandate is to scale up the business of Bonhomia from the current turnover of ₹6 crore to ₹50 crore and then rope in a strategic investor. We have a time-frame of 18-24 months to turnaround the business and make it profitable and have a minority share.’’

Delhi-based Indulge Beverages had already raised three rounds of funding from a group of angel investors led by co-founder and former senior managing director of Helion Venture Partners, Kanwaljit Singh, through his seed stage investment firm, Fireside Ventures.

Others investors include HNIs like Sarvesh Shahra, Business Head (Foods), Ruchi Soya Industries, real estate scion Apurva Salaarpuria of Salarpuria Group, and Shripad Nadkarni, former marketing Head at Coca-Cola India. There were about 12 investors in Indulge Beverages and most of them continue to hold on to their investments in the company

“There have already been a couple of rounds of fund raising and in the last round the business had a valuation of ₹30 crore. We bought management control and have managed to turn it around. It is a growth stage company which was not profitable but we saw a bigger value in the business,’’ added Narsimhan.

The fund already has a corpus of ₹10 crore and will expand depending on the additional money required to grow the business.

“We will look for an exit only after 18-24 months and will function like an asset reconstruction company (ARC) till such time we find a strategic investor,’’ he added. Targeting coffee trading and growing companies based in India and overseas, Indulge Beverages already claims to have a few takers.

“We are in talks and have been getting feelers from MNC companies who are already trading in coffee. It is a new experiment for us since it is a niche category that we have bought into. We are in discussions with investors since we have to exit in the future,’’ he added.

Indulge Beverages founded by former merchant banker Kunal Bhagat and former executive of PepsiCo, Tuhin Jain.

Tuhin Jain, former Co-Founder, Indulge Beverages, said: “We have moved out as promoters and expect a strategic investor to pick up a majority stake via CoCreate. The existing investors have continued to stay invested in the company.’’

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