Venture Financing in Nepal – The Alternative Route

- a unique perspective on the journey of a tech business in Nepal fueled by PEVC financing

Foodmandu deserves acknowledgment for

its bold and pioneering initiative back in 2010, Manohar Adhikari,
a move that not only marked a significant
shift in the landscape of online food ordering Co-founder and CEO, Foodmandu
and delivery services in Nepal but also set
the stage for an interesting journey. The Their ability to bring in expertise along with
introduction of its online platform in the financing was the key motivation to seek a PEVC
Kathmandu valley was a pivotal moment, partner.
heralding a new era in the way people
accessed and experienced food services. Given the conservative nature of traditional financial
At that time, the platform-based services institutions, the company proactively explored
market was still in its infancy, presenting alternative financing options in a strategic manner,
Foodmandu with the challenge of creating aligning with its investment needs. The company was
a market where none existed. However, aware of the, still nascent, Private Equity and Venture
on the other hand, the company enjoyed Capital (PEVC) industry and believed that PEVC firms
the luxury of being able to grow at its own could be attracted by its market influence, ethical
pace, unhurried by competitors. This unique business practices, and the growth vision. And that
positioning allowed Foodmandu to shape its is how Foodmandu’s partnership with its first PEVC
trajectory organically and establish itself as a partner True North Associates (TNA) started in 2016.
trailblazer in the evolving landscape of online TNA’s investment in Foodmandu was also one of its
food services in Nepal. first. TNA needed to assess how its investment would
Over the past thirteen years, Foodmandu pan out if they were to partner with Foodmandu’s
has showcased remarkable resilience, founder who had no other track records. On the other
particularly during challenging periods like hand, TNA was aware of the potential of a “technology-
the 2015 earthquake and the ensuing six enabled business”, and if done effectively could help
months of economic embargo in Nepal. It the business realize its scalable possibilities. Therefore,
posed a significant hurdle, just five years into TNA decided to take a hands-on approach with a “skin
its operations when the company was just in the game” with firm belief that Foodmandu was a
starting to gain momentum. The setback in “disruptive business model” that has the potential to
cash flows compelled Foodmandu to identify change the industry and hopefully provide multiples
means to raise capital to ensure its continued in return. Following its successful partnership with
survival. Foodmandu in 2016, TNA pitched to Team Ventures
(TV) about the company’s growth opportunities as a
tech platform and about its requirements for additional
capital for market augmentation. Recognizing
At a Glance Foodmandu’s local brand visibility and compelling
entrepreneurial narrative, Team Ventures acquired a
Foodmandu Private Limited 20% stake in Foodmandu in 2020. This investment
involved purchasing a combination of new equity
Industry: Tech enabled food delivery sector shares and a partial buy-out of TNA’s holdings. Team
Ventures credits TNA for taking on the pioneering role
Region/Country: Nepal to derisk the company through its Series A investment
Funds: True North Associates, Team and for providing the Series B investment opportunity.
Ventures, and Dolma Impact Fund Team Ventures has also made a partial exit from
Exit Status: True North Associates Foodmandu, by sale of shares to Himalayan Capital
(Partially Exited), Team Ventures (Partially Ltd - a full owned subsidiary of Himalayan Bank Ltd.
Exited)
 Foodmandu received over
USD 4 million investment from
three PEVC funds

Following Team Ventures’ investment in

Foodmandu, the company having gained
further credibility, and was successful in
attracting the attention of Dolma Impact
Fund II (DIF II) in early 2022. Like TNA and
Team Ventures, DIF II found Foodmandu’s
‘disruptive business model’ appealing
and aligned with the evolving lifestyle in 263,000. Currently, the food delivery industry’s gross
Kathmandu and urban centers in Nepal. The revenue stands at USD 206 million shared mostly by the
industry was shifting, and this technological two larger players, one being Foodmandu. Projections
platform had the catalytic ingredients to indicate that the industry’s revenue is expected to
expedite it. Building on the success of reach USD 263.90 million in 2024.
its partnerships, Foodmandu attracted
the attention of DIF II in early 2022. DIF In retrospect, Foodmandu’s journey is a testament to
II’s investment of USD 3.6 million further entrepreneurial vision and resilience. From its bold
strengthened Foodmandu’s core business, inception in 2010, introducing online food services to a
customer service excellence and solidified market yet to embrace such platforms, to overcoming
its position in the rapidly evolving industry, unforeseen challenges like the 2015 earthquake and
taking it to the next level. economic embargo, Foodmandu has not only survived
but thrived.
With the injection of additional capital,
Foodmandu has expanded their services to The strategic shift towards alternative financing and
Pokhara, resulting in the increased number of the partnerships with Private Equity and Venture
employees to 365 (including 250 dedicated Capital (PEVC) firms like True North Associates
riders) and an expanded customer base of (TNA), Team Ventures, and the Dolma Impact Fund
(DIF II) was indeed truly strategic. And as Foodmandu
reflects on its remarkable growth, from navigating
uncharted territories to becoming a major player in a
multi-million-dollar industry, it serves as an inspiring
case study for aspiring entrepreneurs and underscores
the transformative power of strategic venture financing
in Nepal’s burgeoning alternative financing ecosystem.
The narrative of Foodmandu’s journey not only
celebrates its success but also illustrates the symbiotic
relationship between innovative businesses and the
supportive role of PEVC firms in driving entrepreneurial
growth in Nepal.

IIN is a collaborative platform established by British International Investment (BII), the Dutch
Entrepreneurial Development Bank (FMO), and the Swiss Agency for Development Cooperation
(SDC) to complement existing efforts to attract DFI investment to support private sector growth.

The IIN initiative commenced in February 2021 to research and understand the investment market and
ecosystem constraints. Since August 2022, it translated these findings into implementation. This phase
of the programme will run until July 2025.

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