How Investors Are Capitalizing On The Consumer Interest In Low Carb/Keto Diet

Sudarshan Gangrade, Founder & CEO, Lo! FoodsA serial entrepreneur, Sudarshan, in his 3-years long career, has held key positions across an array of companies that include WNS,,, and OLA Cabs, and has even incepted three companies Road Mapp, Leanscience, and Lo! Foods.

India has quickly and firmly established itself as a sought after investment destination. Be it from the biggest funds making some of their largest bets (Softbank, Sequoia, Accel, Naspers, DST, Tiger Global) to an extremely active Angel and Seed funding community. Most of these funds have been Tech focused, and indeed, they also get the lions’ share of voice.

We however now see multiple funds that are beginning to focus on Consumer goods, and infact, there are a clutch of funds that exclusively focus on Consumer Goods space. The dynamics, scaling up and pace of scale up of a Consumer Goods space works very differently; and these funds recognize the same.

Having worked in Ola, India’s largest on demand cab service, when I decided to take the plunge myself, there were multiple paths I had to take in front of me; the most logical ones being in the Tech e-Commerce space. However, having seen firsthand the pace at which consumer lifestyle and expectations were changing, I wanted to build something in the Health space. That led to LeanScience, which offered Diet and Fat Loss Consulting programs. Having worked on that successfully, and having a strong handle on the science of the body as well as the consumer gaps; I decided to go down the Consumer Goods path. The core idea being that products are scalable, and that food can really impact health at scale. Our focus has been to help India cut-down the amount of Carbs they have. In that respect, let’s try to understand the investment community interest in this space.

Any investor interest sparks from an interest shown by consumers around a category. Let us first understand what are the various types of business models that exist in the Low Carb and Keto Diet space.

We need to first define what is classified as a Low Carb/Keto diet. Most of the foods we consume in India are extremely high on carbs. This includes even the current favorites like millets, multi grains,
Jaggery/brown sugar, and more; everything is high on carbs. A typical Indian diet would land at around 80-85 percent of Carbs. While various definitions abound, a Keto diet is an extreme form of cutting-down Carbs, typically to around 80-90 percent (if not more) lower. A Low Carb lifestyle on the other hand would typically involve being less than 120-150 grams of Carbs intake in a day. This implies anywhere between 50-70 percent lower Carbs than you would typically have.

The dynamics, scaling-up and pace of scale-up of a Consumer Goods space works very differently

Types of Business Models

A low carb or keto lifestyle requires changes in all forms of food that we eat. It isn’t just about replacing one food item or one meal. Hence, it covers everything from mainline fresh food (Lunch, Dinner) to packaged foods(snacks). To be able to deliver all forms of food, existing companies focus on specific or multiple models:
1.Fresh Food Meals: Companies and outlets that provide fresh food that is Keto friendly. You can order them from their websites/any of the Food delivery aggregators. E.g.: Keto Kitchen.
2.Meal Replacements: Some companies offer replacements for meals, in the forms of smoothies and other products that fill you up and can serve as a replacement for a traditional meal.( GrowFit, for example)
3.Packaged foods: Snacks that serve to handle the pangs during the off meal hours.
4.Ingredients: This covers things like Atta, batters and others, which are then used by consumers to make fresh foods. E.g.: Lo! Foods, Ketofy

Companies like GrowFit and Diet Delite cover multiple business models from above; having fresh food as well as packaged foods range.

Size of the Opportunity
Purely from a Keto diet food perspective, across all the models, the market is but a small sliver, probably in the range of Rs.25-30 crores.

Investor Interest
Most of the key players have raised some rounds of funding. Lo! Foods, which is a packaged and ingredients range of food products; has recently announced a round of investment led by some of the biggest names in the FMCG and Financial world. Growfit had raised almost $4.5 million couple of years back. Well Versed (owners of the brand Ketofy) have also raised an undisclosed sum. SQUATS, a Pune based health and wellness firm, whose trainers often advocate a low carb and keto friendly diet routine for their clients; has been valued at Rs 350 crores, with Bollywood star Suneil Shetty investing in the same. HealthifyMe, which is India’s largest health app, also carried a range of Low Carb and Keto products. Healthify raised $12 million of funding last year.

Most of the funding is done keeping in mind that the audience following a Keto Diet is getting larger. A Low Carb - Keto diet also covers the very large Diabetes segment. Estimates place this market at anywhere between 50-70 million people in India. Companies like ours however, are going after a larger market, where we are benchmarking against the ‘Healthy for you’ category. However, the catch here is that the category needs to be created. This will require patience, commitment, scientific know-how, and most importantly, innovation. Indian food habits are unique. They need somebody to provide an option that is inherently Indian, yet healthy and Low on Carbs. The need of the hour is for more entrepreneurs to innovate for India, rather than copy from the west. The investor interest will follow, as long as the product is top notch and relevant.