Medusa bets on spirits to diversify beyond beer, ties up with Stranger & Sons maker
Beer maker Medusa Beverages Pvt. Ltd plans to raise ₹200 crore in two tranches over the next two fiscal years to expand its beer business and enter the spirits market through a partnership with Goa-based gin maker Third Eye Distillery.
The company is targeting gross revenue of ₹210 crore in FY27, higher than ₹165 crore reported in FY26, founder and chief executive Avneet Singh told Mint.
The company has yet to become profitable, with net loss widening from ₹2.8 crore in FY24 to ₹4.2 crore in FY25, as per the latest figures from the business intelligence platform Tofler.
The partnership gives the beer maker exclusive rights to manufacture, bottle, distribute and sell a portfolio of Third Eye brands across 15 states in North India and Jharkhand. While Third Eye will focus on the products’ liquid, quality control, and brand marketing, Medusa will produce them and use its distribution network and relationships with bars, restaurants, and hotels to drive sales.
The initial spirit portfolio will include Short Story gin and vodka, and Stranger & Sons gin. It will later add its Peru Road, a Peru-infused gin, with more brands, including whisky, expected to follow, Singh said. The company expects the tie-up to generate about ₹20 crore in gross revenue in its first year.
The Delhi-based company is also preparing to launch its own whisky in the next 45-60 days, at a price at ₹850-1,000 range, Singh said. The launch would give it another product beyond its flagship beer.
Third Eye Distilleries reported sales of ₹17.9 crore in FY25, flat compared with ₹17.3 crore in FY24, according to Tofler. The company remained loss-making, although its operating loss narrowed to ₹2.9 crore from ₹22.3 crore a year earlier, while its net loss declined to ₹4.8 crore from ₹24.1 crore.
“The economics of the two categories are also different. Beer generates gross margins of around 30-35%, while premium spirits can generate margins of about 65%,” Singh said.
The spirits partnership allows Medusa to enter the category without building a distillery or developing every brand from scratch. “It will also help us reduce our dependence on beer during off-peak seasons like winters when sales of beer naturally dip,” he added.
Fundraise in two tranches
Medusa plans to raise ₹200 crore in two tranches, with ₹50 crore in FY27 and the remaining ₹150 crore in FY28, Singh said. The first tranche is expected to be raised through compulsorily convertible debentures, which will convert as part of the larger funding round. He did not disclose the valuation details.
In January 2025, it secured ₹56 crore in its Series A funding round led by investors in their private capacities, including Amal N. Parikh, promoter of Ohm Stock Broker, and Ashwin Kedia, co-founder of Alchemy Capital Management. The fresh capital will support expansion across beer and spirits, including investment in distribution and manufacturing capacity, Singh said. The round valued the company at approximately ₹280 crore.
Medusa currently relies on contract manufacturers for beer production and does not own a brewery. “Once operations stabalise further, we will also look to set up our own brewery in North India once volumes justify the investment,” Singh said.
The company has been cautious about committing to manufacturing capacity before it can ensure adequate utilization.
Beer remains Medus's main business. Its flagship product, Medusa Premium Strong Beer, is a strong lager; the portfolio also includes Air, a milder lager. The company's gross revenue is below its earlier target, as a shortage of aluminium cans and higher costs affected the industry. The company sold about 1.35 million cases in FY26.
India sells about 440 million cases of beer annually.
The pressure on margins is not limited to smaller beer makers. United Breweries, which makes Kingfisher, has warned of a ₹400-500 crore hit to profitability from rising packaging, fuel and logistics costs in March this year. The company has also flagged a 5-6% increase in cost of sales beyond its planned inflation assumptions.
With state governments controlling beer prices in several markets, brewers have limited room to pass on higher costs to consumers, leaving them to absorb much of the increase.
Medusa operates in 10 states, with Delhi, Haryana and Uttarakhand among its key markets.
“We have to go deeper in each state rather than just widen our geography,” Singh said. Medusa competes with established brewers such as United Breweries’ Carlsberg and Anheuser-Busch InBev’s Budweiser, as well as domestic brands such as Simba and Kati Patang.
The company has positioned itself in the strong-beer segment, while adding milder options through Air. Around 82% of its sales come from affordable products and 18% from premium offerings, Singh said.