Kirin Holdings of Japan is investing USD 30 million in the brewer of India’s most successful craft beer brand Bira91. In turn it will receive a minority share of less than 10 percent in New Delhi-based brewer. The investment in B9 Beverages consists of a 50:50 split between equity and debt, the company said on Monday.
B9 anounced in August to be in talks with international brewers - including Kirin - to sell a stake of up to 20% "We've been talking to beer companies that are not competitive in India or have minimal operations in India," said Ankur Jain, founder and CEO of the company at that time without disclosing names. However, people close to the matter said already in August said talks with Kirin were most advanced and a deal with the Japanese brewer was most likely. (inside.beer, 11.8.2020)
Jain launched Bira 91 (the number stands for India’s country code) in early 2015. After an initial phase where the beer was brewed in Belgium and exported to India he transferred production to India. In order to finance the venture, Jain raised over USD 130 million across several funding rounds from financial investors U.S.-based Sequoia Capital and Belgium-based Sofina (inside.beer, 10.5.2018). This gave Sequoia Capital a stake of about 45% in B9 while Jain and his family remained with about 30% of the shares.
Last year, B9 – like most of the craft breweries around the world – was severely hit by the measures to contain the Coronavirus including the nationwide COVID-19 lockdown.
In order to secure the much needed funds the company already raised in April USD 30 million from the two anchor investors with participation from Mumbai-based consumer-focused venture capital fund, Sixth Sense Ventures, South Korean private equity fund Neoplux, and certain family offices. In May B9 raised another USD 5 million from Sequoia and Sofina.
It has been speculated that the two anchor investors were now the driving force for the deal with Kirin as it eases the financial burden of the two investors and gives the business a new perspective. Due to the rapid growth, an increasing competition from other brewers in India and the COVID19 pandemic, B9 has posted losses in recent years. The investment will allow B9 to break even in the 2022 fiscal year which starts in April 2021, Jain said.
In addition “the companies will be exploring business synergies,” Jain said. He hopes that the deal will help to accelerate plans to launch Bira91 in Japan later this year. In turn, Kirin will get an instant access with its brands to India's estimated USD 7 billion beer market.
Bira has currently a 5-10% share of the beer market in cities such as New Delhi, Mumbai and Bengaluru which adds up to an overall beer market share of 5%, and over 20% share in the premium beer category in India, according to the company’s own statements.