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Utham Gowda on Building a $1B ARR Seafood Platform Across 3 Oceans
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In this episode, Utham Gowda, Founder and Group CEO of Captain Fresh, reveals one of the most dramatic startup transformations in Indian agritech. After raising $90 million and hitting $100 million in revenue, Utham did the unthinkable - he admitted to investors that Captain Fresh wasn't worth its $500 million valuation and shut down the entire domestic business. What followed was a masterclass in radical honesty, strategic M&A, and global expansion.
He shares the journey in this candid conversation with host Akshay Datt, unpacking how Captain Fresh went from domestic marketplace to global seafood conglomerate, achieving profitability with 3,421 crore revenue in FY25 while competitors like eFishery collapsed in fraud scandals. From wiring $49 million on a flight to acquiring 10 companies with zero debt, from living on 50,000 rupees monthly to building a $2 million revenue-per-employee machine, this is the playbook for building anti-fragile B2B platforms in the age of supply chain nationalism and capital scarcity.
What You'll Learn:
👉How Utham Gowda built Captain Fresh into a $600M+ seafood platform and survived India's funding winter with radical business model honesty
👉The equity swap M&A strategy that acquired $120M+ in companies with zero debt and zero management changes, tripling EBITDA in acquired businesses
👉Why Captain Fresh exited India's $100M domestic market and how the global pivot to US and Europe unlocked 145% revenue growth and profitability
👉How Trump's tariffs accidentally validated Captain Fresh's origin-agnostic supply chain, enabling a 45-day flip from 66% Asia to 66% LatAm sourcing
👉The "Lion vs Cow" founder philosophy behind achieving $2 million revenue per employee and targeting 27-28% ROCE by FY27
👉Inside the collapse of eFishery's $1.4B valuation fraud and why boring tech beats fake tech in B2B physical goods businesses
#UthamGowda #CaptainFresh #FounderThesis #AkshayDatt #SeafoodStartupIndia #B2BSeafoodMarketplace #AgritechIPOIndia #IndianUnicorn2026 #StartupPivotStrategy #EquitySwapAcquisitions #MandAStrategyStartups #ProfitableStartupsIndia #GlobalSeafoodSupplyChain #StartupFundingWinter #IndianFoundersGoingGlobal #B2BStartupsIndia #SeafoodExportIndia #AntiDumpingTariffsIndia #SupplyChainResilience #AssetLightBusinessModel #StartupMandAPlaybook #IndianAgritecth2025 #CaptainFreshIPO #SeafoodIndustryIndia #FoodSupplyChainDigitization #IndianStartupSuccess #FromBankerToFounder #ZeroDebtAcquisitions #OriginAgnosticSupplyChain #FrugalFounderPhilosophy Disclaimer: The views expressed are those of the speaker, not necessarily the channel
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Transcript
Uttam Gowda's Journey with Captain Fresh
00:00:00
Speaker
I thank Mr. Trump whatever he has done because he has brought out the beauty of our business now. I have travelled 1.8 million kilometers in the last three years. I used to go and sit in these railway stations and then look at the way the products are moving.
00:00:16
Speaker
I was entering the passport to buy 49 million dollars. If I had got that move wrong, that was the end of Captain Fresh. Uttam Gowda is the founder of Captain Fresh, a profitable billion dollar ARR business. Captain Fresh has acquired multiple American and European companies to become a global seafood supply chain giant. Almost in this whole global fish and seafood new age company space, we almost are like the last man standing today. Why are you the last man standing? What happened to the other companies?
00:00:45
Speaker
The biggest handicap of this industry is the industry doesn't know how to raise equity capital. M&A has failed largely because of three reasons. One,
00:01:01
Speaker
Before we start the episode, I just want to tell you that this one is a little different. I first met Uttam and recorded with him in January 2025. That time they were bound for an IPO. So what you're about to hear for the next hour, hour and a half is the conversation which I had with him last year in January, which still remains super relevant today because it talks a lot of the origin and how he discovered his idea and really formed the thesis because of which today they are almost touching a billion dollars of ARR. The second part of this conversation was recently recorded about a week or two back. So that part of the conversation is more about going deeper into the thesis and how it proved out over the last one year. Let me know if you think you would like more such long, deep dive kind of conversations. This one is probably going to be a two and a half hour plus episode. I'm curious, is there an audience for such long format ah conversations?
00:01:59
Speaker
Uttham, you're one of the few first-generation founders of a large seafood business. ah ah Did you grow up eating a lot of seafood or how did you discover this space?
00:02:11
Speaker
Interestingly, my love for seafood as a product to consume and love for seafood as an industry kind of all happened at the same time. And i ah the way I really got introduced to this category is possibly one of the most boring ways any entrepreneur would get into an industry.
00:02:30
Speaker
So I used
Comparing Indian and Norwegian Seafood Industries
00:02:31
Speaker
to be this analyst in an investment bank. And I was tasked to find the next sunrise sector, so to say. And as an analyst, I went out and downloaded all the private company financials.
00:02:43
Speaker
And then I segmented by sectors ah to find that, yeah, here there' is an industry which is making sense from an economic standpoint. But not much smart capital strategic interest has flown in.
00:02:56
Speaker
ah Why not dive in? So that's how my interest in seafood and my interest with seafood started, honestly. ah This is at Capital.
00:03:08
Speaker
This is at O3 Capital, yeah. Can you tell me the economic case for this industry? like Like you would have done your research and come up with an economic case. What is that economic case? So the framework was roughly, you know, around is the is the industry large?
00:03:24
Speaker
ah So anything that was about 25,000 crore from that standpoint is something that qualified for that framework. And are there companies that are large already in this industry?
00:03:37
Speaker
Again, there were several companies in the 500 to 1000 plus crore mark. The third one is, is there been consistent profitability in this industry ah over a five ten year period?
00:03:51
Speaker
That's also something that a lot of players qualified. And the fourth one is, is the return on capital employed profile attractive? Because that's finally the proof of pudding, right?
00:04:04
Speaker
So, here there here was an industry where all of these qualified. And the fifth one was essentially around, yes, if all of this is true, ah is this industry still, ah ah is it already discovered by the capital, smart capital, or is it it to be discovered? So, is it about the last 10 years, was there any investment?
00:04:27
Speaker
from private equity or was there any cross-border deals, right? What's the activity like? So, those are all the parameters that went into this framework. And coincidentally, if I recall very, very succinctly, seafood did stand out as the top category.
00:04:45
Speaker
And just for completion, I think the other two categories that I had shortlisted, one was flavors and fragrances. which is basically the back end for all your ah ingredients and FMCG.
00:04:56
Speaker
ah Third one was spices, the domestic spices opportunity. Like the MDH market. Yeah. Okay. Okay. Fascinating. um Who are the... So you said there are large players in this industry already. Are these players, like say, the kind of names I would see in the freezer of a supermarket? Or are they... I mean, are these the players who do retail or are there other types of players also who the retail audience would not be exposed to?
00:05:26
Speaker
Interestingly, the players who have made it big are the players who have played this business outside India from a demand standpoint. So, the intersection of the names that you would see in the retail freezer in India and the players who are large would not be very, very high.
00:05:46
Speaker
Okay. Who are the last players? Can you name some names? large players from India would be a Falcon, ah would be Avanti, Nekkanthi, Devi Seafoods, Devi Fisheries, Sandhya Aqua, Sandhya Marine, Liberty Seafoods, Aswini,
00:06:03
Speaker
So each of the players that I mentioned now are north of 1000 crores in terms of annual revenues. And what they do is ah take raw material from India, clean it, package it, export it.
00:06:19
Speaker
Correct. So what they do is they're ah they're an exporter, they're a processor and an exporter. their suppliers or the farmers, their customers end up being all kinds of channels in the US predominantly and some of them Europe as well.
00:06:35
Speaker
So all your retailers like Walmart, Cober, Costco could be their customers or it could be some brands in the US who further distribute to some of the more atomized part of the demand like a food service in the US or Europe for that matter.
00:06:51
Speaker
Okay. Okay. I've never heard of ah Indian seafood being spoken about. Like, say, you have Norwegian salmon or you have basa from Vietnam.
00:07:03
Speaker
ah What is Indian seafood known for? Like, is there a type of a variety of fish or something that it is known for? or See, largely in the seafood world, you have tropical fishes.
00:07:16
Speaker
which are the fishes or the seafood that thrives in the 20, 25, 30 degree Celsius environment or you have cold water fishes ah which thrives in sub-zero, minus 10, minus 15 kind of environment.
00:07:37
Speaker
Can you name some names of both of these? Salmon, cod,
Transitioning from Banking to Seafood Entrepreneurship
00:07:41
Speaker
pollock, salith, haddock. These are sub-zero cold water species. Okay. A shrimp, crab.
00:07:51
Speaker
Crab, of course, has both varieties. There's a cold water crab. There's warm water crab. ah Your tilapia, basa, snappers. Some of these are tropical fishes or tuna for that matter.
00:08:04
Speaker
Tropical. Okay. ah So, India is someone one ah one of the most prominent players on the tropical side of the seafood.
00:08:16
Speaker
ah Now to your point around you heard of Norwegian salmon, but you have not heard of Indian seafood is essentially where the gap is and to to some extent is also where the inspiration for Captain Fresh stems from.
00:08:31
Speaker
The fact of the matter is that we have 14.5 million tons of fish that is produced from India. The overall export value from India is just $8 billion. dollars The sum of market cap of all the companies that are doing seafood and listed in India is less than $2 billion. dollars Now, if you contrast that with Norway,
00:08:55
Speaker
Norway produces less than 2 million tons. So that is one-seventh the volume of what India produces. It does almost 20 billion dollars or tons of export.
00:09:06
Speaker
That is more than two and half times what India does. But the suite the the real contrasting part is the market cap, the sum total of all the market cap of all the seafood companies from Norway is north of 30, 40 billion dollars, which is 15 times what Indian seafood players um total to. This essentially comes from the overall storytelling that the Norwegian constituents have been able to do and the overall credibility that they are able to but put out in the global market, which essentially gets the premium, which translates into value created either at export level or at market cap level. right
00:09:50
Speaker
So I would say, yes, there are many products that are out there from the Indian context, but the story needs to be told to a larger cross-section in a compelling, in a convincing manner to be able to replicate a Norwegian salmon story ah fascinating from an Indian context.
00:10:09
Speaker
You know, i live in Japan and ah I read somewhere that... ah but While today the salmon sushi is one of the most popular sushis that you see in a supermarket, but traditionally Japanese people did not eat salmon sushi because raw salmon was considered to have impurities or it wasn't considered to be safe for consumption in the raw form until Norwegian salmon came along and they possibly told a good story and changed that perception to now make salmon sushi as one of the most popular sushis in Japan, I guess.
00:10:46
Speaker
I think the way Norwegian salmon players have converted sushi into salmon is itself is a massive case study. Because sushi today is one of the largest vehicles for seafood into a consumer palette.
00:11:02
Speaker
And I'm not talking about Japan alone. I'm talking about globally. And they very, very, you know, in a calibrated, deliberate manner, they have conquered that space and in a dominant way.
00:11:16
Speaker
And that itself, in fact, if you ask me, is a big upgrade in terms of their own addressable opportunity. So those are some of the things I would say i would like, i would love to learn from some of these evolved markets, evolved suppliers in terms of truly they've played a very sophisticated monetization game.
00:11:39
Speaker
There's a lot that ah countries like India need to be inspired from. How did Norway do it? in Any like top top level stuff you can tell me? Like how did they change the game? How did they build that? So I think one is seafood, but overall at a country level also, I think Norway is one of those countries which has discovered a lot of natural resources after it has achieved its economic freedom.
00:12:02
Speaker
after it ah it has achieved its political freedom and it's that democracy has been thriving. As in just so as a other site as a side chat, I am sure you would know, Norway is one of the very few oil-based economies where there is no threat of dictatorship.
00:12:19
Speaker
It's a full, well-governed democracy at play. It's the only... Right? And they have actually extrapolated the same principle in terms of how to respect nature, how to think long-term, how to ensure the those the structures are built in terms of the interaction between ah humans and these
Scaling Challenges and International Focus
00:12:41
Speaker
natural resources. Right?
00:12:42
Speaker
So, now taking that same principle to fish and seafood industry, ah They have obviously built a very, very strong licensing system for any of the private players to leverage or use their resources.
00:12:57
Speaker
The resources being yards. Yards are basically the ah the cold water hotspots or so to say cold spots, which gives you a thriving condition for ah salmon growth.
00:13:10
Speaker
And this is regulated, this is licensed and it is in a very transparent manner, just like we have, let's say, or are to 5G bandwidth allocation. right There is a bid-based system for them to allocate.
00:13:24
Speaker
And then there is a very clear monitoring of the quality of product that goes out of Norway. ah In fact, if you are ah if the product is considered tier two or grade two, it is illegal to export out of Norway.
00:13:37
Speaker
And some of these are good on paper in terms of rules where it gets differentiated is when they are able to and enforce these laws. right So Norway has managed to enforce that law.
00:13:49
Speaker
Wherein a grade two product can never leave Norwegian shores. Now, when you do this over a compound compound period of 10, 15, 20 years, it compound compounds in a form of origin brand.
00:14:02
Speaker
Okay. So ah coming back to your journey. So at O3 Capital, you did an academic exercise to find out opportunities and you spotted three of which Seafood was one.
00:14:15
Speaker
What next? So after that, I went out scouting for companies that could be interesting for me to work with. I met founders, promoters across the country, almost 15, 20 of them.
00:14:30
Speaker
And then I found one company which was very interesting, a company by name Nick Kenty, the second generation founder educated in the US who had aspiration to transform his family managed business into a very professional setting.
00:14:45
Speaker
So that was an ideal setting for me to say, okay, look, maybe as a banker, I can come and help you get some private capital and and then the board gets reformed and you know, we can have a path to professionalization and maybe at some point IPO as well.
00:15:02
Speaker
So, picked up that. What was Nekati's business? Was it exporter? So, they were a shrimp exporter. So, they used to buy shrimps from raw shrimps from farmers, freeze it and then sell to the retailers in the US. Okay.
00:15:17
Speaker
Okay. So I started this process for them and it was on the private market side. Spent like a year, year and a half. But during this process, they there was there was this whole law ah excitement in the public market and they ah ah kind of redirected their interest towards listing ah from a private fundraise.
00:15:42
Speaker
So, at that point in time, actually for me at my career, yes, I had spent some time in investment banking. But somewhere I was starting to realize that it's not compounding enough. um because so ah you kind of move from one project to another and you're only as good as your last project.
00:16:01
Speaker
So I wanted to do something that is a little bit more compounding and clearly moving to industry was one of the options. And like I said, amongst the industries, I had selected seafood and more and more I understood about the seafood. I was more intrigued and I was more convinced that.
00:16:15
Speaker
In the long term, there could be a value creation opportunity here. So, when this opportunity came about where I could move from ah investment banking to an industry to help this company Nekenti to go public, it was a contrarian call for an investment banker based in Bombay to shut shop there and then move to Isaac with family.
00:16:38
Speaker
But logically for me, it did not seem like that contrarian thought, yeah, it could be an interesting one. ah So I moved to Wysak, moved to Nekenti.
00:16:49
Speaker
i'll The primary agenda was to get the company listed. That was the core mandate. But I did end up doing a lot of other things around it, like ah work with sales, work with manufacturing, work on a bunch of things on the supply side.
00:17:04
Speaker
So it was like a little bit like a my own tutorial in this industry. And I had this privilege of being part of a cockpit, sitting alongside an operator in a company that is ah in its own way, one of the most successful Indian company in an industry which is not that well documented, ah not that well researched.
00:17:30
Speaker
So, it was like a kid in a candy store. It was for me like a great learning opportunity. I went about learning whatever I could along the way ah for those year, year and a half. Like I said, my primary mandate was to get it listed.
00:17:44
Speaker
But I ended up doing all of these other things along the way. Okay, fascinating. um What made you want to quit Nikanti? I mean, you could have had a fulfilling career within Nikanti, only publicly listed business.
00:17:59
Speaker
So why did you decide to quit and start on your own? So along the way, ah we did not go public. ah So while we cleared a lot of hoops towards going public,
00:18:14
Speaker
Eventually, we didn't go public. And for me, it was a question around, okay, should I continue as a professional in a family-managed business? or ah At some point, I was also inspired that ah there is so much more i could do in this industry.
00:18:31
Speaker
And I've been fortunate to have seen all sides of it as an outside-in, inside-out. And also, what I was really fortunate about is the whole IPO journey itself. because I was part of the whole team that was meeting these public market investors as part of roadshows.
00:18:50
Speaker
So it's very, very insightful in terms of how an industry which is at a cusp of getting listed, a company which is getting cut, the cusp of getting listed, how it is seen from a public market investor lens.
00:19:03
Speaker
And for me, that was the holy grail of you know company building, um because I believe that everybody... builds at
Leadership and Decision-Making Philosophies
00:19:11
Speaker
some point to get listed. Right.
00:19:13
Speaker
So, so those lessons, those questions, it was very, very foundational for me in terms of driving. Okay. Now you have such a great end to end learning of how to be built or what is to be built, understanding gaps, even a primer of ah ah how a public market looks at it in terms of current gaps, all that.
00:19:38
Speaker
So I thought, This is a privileged position to be in and I shouldn't waste this. I should make more out of this. ah So the first version of this was not around me building a company.
00:19:53
Speaker
First version of this was actually around me putting together a fund and investing in startups who are at the cutting edge of this industry. I put together a small fund like 25-30 crores. Again, it's from the same friends in the seafood industry.
00:20:11
Speaker
ah ah more like More than putting together, I was managing the money. of Some of these guys in the seafood industry were aspiring to have a piece of action in the domestic side.
00:20:24
Speaker
ah then went about meeting a lot of entrepreneurs who have in well in our started business, the usual names in this industry at that point in time.
00:20:36
Speaker
So that gave me a good color in terms of what are the typical problem statements entrepreneurs are looking at and how are they approaching it. Now, one, i have I was exposed to the seasoned operators and now how are new age guys looking at it?
00:20:50
Speaker
And somewhere I thought that I could i had the best of both worlds. One, I had some second order, third order insights, ah thanks to being part of a large organization and being part of an industry and exposed to us, front end in the US, front end in China, back end, some of the few other parts of the world.
00:21:10
Speaker
And the fact that, yes, I also had an ability to connect the dots thanks to my consult plus investment banking career, having seen a lot of other mature industries.
00:21:21
Speaker
And this little stint about meeting a lot of these entrepreneurs, evaluating them and seeing, i ended up investing in three, four of these companies, by the way. ah Doing all of these things also gave me a ah zero to one flavor to this entire thing. right What would your first day look like if you want to say decide and want to start the company?
00:21:41
Speaker
What would your 100 day look like? right ah Translating all of those big bang PPT slides into ah those smaller details in terms of how that translates to a real business.
00:21:53
Speaker
So, it was a combination of all three that really pushed me across the over the edge, I would say, in terms of saying that, yeah, I can start. I think the final push was from the old ah employer, the my old boss, who actually stepped up and said, look, ah why don't you take this amount of capital and use this as a seed capital to start this company, right?
00:22:15
Speaker
In a way, he believed that I could be an entrepreneur more than I believed that I could be one. And I think some of these German journeys, you need ah such godfathers. So, yeah. So, that was the start of Kuttam as an art.
00:22:30
Speaker
Amazing. So, so this is talking about your O3 capital boss? No, no. I'm talking about Nekkanthi boss. ah Venkat Nekkanthi. Okay. Amazing. So, what did you start with? What was your version one of Captain Fresh? What space particularly did you go after?
00:22:48
Speaker
So version one of Captain Fish, like I'm sure you'd have spoken to a lot of entrepreneurs, they'll say. I think I was not clear about what I wanted to want it to do, but I was clear about what I didn't want to do. What I didn't want to do was build a B2C business, right, in terms of taking the fish all the way to the consumers' households. I was very clear on that.
00:23:09
Speaker
What I didn't want to do… Margin is not enough or… ah No, I think there are two, three, ah two, three ah logics to this.
00:23:20
Speaker
Yes, I think the margin not being there is a symptom of it. Okay. ah But what is the real problem is that India is, ah yes, while India, 70% of India consumes ah meat and seafood.
00:23:36
Speaker
ah Their frequency of consumption is very unique when you compare the world. ah India is still a Sunday non-veg category country.
00:23:47
Speaker
and Unlike, you know, what you've seen everywhere else, right? It's a three p three meal protein for everybody else. So how does that transfer and how does that reflect onto the supply chain?
00:23:58
Speaker
Is that those four hours in a Sunday or in a year, those 200 hours actually make up for almost 60, 70, 80% of the trade at the country level, which means that if you are an organized player who is building a supply chain, is building capacities to serve this demand, ah you will have such a significant portion of idle time ah And if you are over-indexing on B2C, then you are actually building for a service level for those four hours.
Optimizing Supply Chain and Global Sourcing
00:24:31
Speaker
But your capacities are built for the entire week, right? So that intuitively didn't make sense to me. that we can build a know ah great service or brand in this business here in India.
00:24:45
Speaker
And second is I always wanted to make this a global business. And I clearly knew that everywhere else, there is a very, very generous amount of real estate already allocat allocated to this category and a very efficient real estate. It's not like you know ah there is enough and more pockets of inefficiencies to be unlocked or solved for.
00:25:05
Speaker
So clearly, I knew that B2C is not a global game. It's a very India-specific, Hindu-oriented game, which is a Sunday non-witch kind of a thing. So that's what, you know, intuitively, I was not drawn to the problem statement.
00:25:21
Speaker
ah When you say there is enough real estate allocated to this outside India, you mean to say the freezer space in supermarkets? So you walk into any supermarket in the US, I'm sure in Japan as well, one third of the real estate is typically animal protein.
00:25:36
Speaker
Okay. Right. True. Got it. Yeah. Okay. The second is I was clear that I don't want to do anything outside of fish and seafood, like a meat or a chicken or any other category.
00:25:52
Speaker
Again, the the driving principle was that I wanted to build something global. And I knew that chicken in India does not have right to end in the global marketplace. Thanks to its cost structures and the policy choices that we have made.
00:26:05
Speaker
And third is mutton, which is the third largest category, but it's not a global consumption category. Mutton is a very tribal piece, which is popular among some the, you know, tropical areas largely like India, some parts around.
00:26:21
Speaker
And beef is something that I, again, it's a very different beast I didn't want to be part of. ah Can you zoom in on the chicken thing? You said there are some policy decisions because of which chicken is not likely to be... I think our feed is so expensive ah compared to all ah other markets.
00:26:42
Speaker
Why is that? Maybe because we are not allowed to use anything modified genetically modified. ah Unlike in other markets. Again, I'm not a subject matter expert.
00:26:54
Speaker
But high level, these were my learnings. Okay, got it. But having said that, also industry is far more consolidated. There are already ah some large $2-3 billion dollars players in the Indian context.
00:27:09
Speaker
Not just in Indian context, even in the global context. If you take a four, you know, seafood and poultry are equally sized. Seafood is a $450 billion, poultry is $450 billion.
00:27:20
Speaker
Whereas the largest player in poultry is a $50 billion dollars Tyson. Largest player in seafood is $5-6 billion dollars player. So even at a global level, the consolidation levels, like five top 5 players for poultry make up for 25% market share globally.
00:27:36
Speaker
Top 5 players for seafood make up for 3-4% of market share. So, you know, that's also a thing that that's the benefit that I had as an entrepreneur. I was very, very analytical, i very top down, very some of these had to make intuitive sense to me from a bottom up data.
00:27:55
Speaker
Only then I would pick some these problem statements. you know, i'm I'm loving our conversation so far. So yeah, those are some the things that are very clear I wouldn't want to do. and So what naturally what I was also trying to do is ah learn from the existing business models that are out there in the B2B space.
00:28:13
Speaker
So here was a point in time where, you know, there used to be an India Mart or um the were not The generation one play, which is a classified business in the B2B realm, it didn't make sense for us because ah ah monetization levers are very few in a classifieds business. ah Second was the overall distribution play.
00:28:38
Speaker
which is the Ninja Kart, Udon type of players. where That's where I thought that our model fit in. Or rather, what I thought the gap would fit in because India did not have a single large multi-city B2B seafood player.
00:28:56
Speaker
It was a clear gap that I could see. And from a fitment of technology, you have a supply which is fragmented. You have a supply which is very, very non-standard, which is very perishable.
00:29:12
Speaker
And you have a demand which is again very, very fragmented. which is very, very das and are spread out from a geography standpoint. You have an operation which is very complex, like each species, moving one species from one origin to the demand has its own nuances in terms of supply chain.
00:29:29
Speaker
So, which meant that if you are running 100 or 200 such supply chains on a daily basis, ah putting ah perishable inventory on top of these ah railroads, it needs to be very agile and flexible and know self-correct and all that, which meant that there is some high level use case for technology optimizations, all of that. So that was the thesis and I saw that playing out in various forms in an India card, Udon and some of these other marketplaces.
00:30:04
Speaker
So that gave me an inspiration that, yes, this could be an interesting problem statement to go after. At a global level as well, the gap that I had seen was while the industry was structured as a salmon shrimp plate,
00:30:18
Speaker
ah There were very few players who were actually
Building a Flat Organizational Structure
00:30:21
Speaker
providing a basket or a seafood as a solution to a customer. And the customer insight that I was so relating to is that when you walk into a seafood aisle, you are not really looking for a white shrimp or a red shrimp or a green shrimp or a black shrimp or a salmon or whatever that is. right You generally have some inclination towards seafood and you would want to buy something in that category.
00:30:46
Speaker
So when you are structured as a specie player, whereas a customer sees you as a basket, you will start and unlocking lot of layers of inefficiencies at a structural level in industry. right So that's also a paradox that kind of interested me in terms of looking at it as a basket and then figuring out a way to unlock supply chains, go back in the supply chain in a digital asset light, agile manner.
00:31:14
Speaker
So that was the overall playbook. And yeah, found that as a gap. And that's how I started. You started global and domestic both together? or No, global was not something that I started on day one. And in all honesty and transparency, I don't think I had global as the spotlight the way it is today.
00:31:35
Speaker
And that, you know, day one. Day one, super excited about India. Started. We grew very, very fast, very quickly. We became a hundred million dollar player. ah We were in very a lot of cities, more than 20, 25 cities.
00:31:51
Speaker
One or two questions I want to ask here. ah So is the seafood consumed as a packaged product or is it also sold loose?
00:32:03
Speaker
I'm from a city and I've always bought seafood in a packet, frozen with a brand and a label and all that. Is that generally how it is, ah the seafood market? Or is it also sold loose? Like say, chicken you will buy loose also depends on personal preferences.
00:32:20
Speaker
So if I were describe the seafood demand side, it's one of the most unorganized demand ah that you can ever think of. Right?
00:32:30
Speaker
I spoke about the whole spikiness of seafood demand, right? Even the channels are configured to play towards that spikiness.
00:32:42
Speaker
What I mean by that is a channel typically has two choices to make in terms of how much capital infrastructure they need to build out and how much time they need to dedicate. right These are roughly the two ah investments that they do.
00:32:57
Speaker
Here is an industry where all the stakeholders, actors who sell seafood only invest time in this business. They don't invest infrastructure. And their infrastructure investment is bare minimum.
00:33:10
Speaker
So, largely 80% of India's seafood consumption is driven through these hawkers who basically crop up on a Saturday or on a Sunday, do this for 5 hours, 6 hours and then they disappear from this category.
00:33:28
Speaker
Logically, because like I said, for rest of the idle time, you can't have any real estate. You who don't even want to be spending your time. These are all guys who do this as a part-time. They have other things to do when seafood is not decategate. It's like a newspaper route for them, basically. Yeah, it is. It is.
00:33:47
Speaker
So there are very few channels with a dedicated infrastructure, dedicated cutting, dedicated packaging, dedicated all of this, which is over 365 days, right? a Very few channels. that That percentage would be less than 2-3% of India's consumption.
00:34:03
Speaker
Wow. Okay. And that 2-3% would have an online play, would have a quick commerce play, would have a modern trade play, all rolled into it. hu So these frozen packaged shrimp and fish and all is just 2-3% of the market. Most of the market is super tiny.
00:34:20
Speaker
It's super tiny. india Indian seafood is delivered by hawkers. Okay. So when when you started, which part of the market were you catering to? The the organized retail or the hawkers?
00:34:33
Speaker
So we started with organized. In fact, we started with online. We started with modern trade. ah And also, these are some of the things that I have learned now after three, four years, right? When we started, obviously, it's not a well-researched industry.
00:34:45
Speaker
We never thought it was just 3% or 4%. We thought it would be much larger. And we discovered city by city. And obviously, Bangalore, you go in and then you you tend to extrapolate Bangalore to other cities. The reality is that there is only one Bangalore. In fact, there is not even one Bangalore. There are only...
00:35:08
Speaker
one Kormangla, one Indranagar and use one Rajaji Nagar, one Banshankari, right? Even Bangalore, right? Bangalore also, Yalanka is so much different compared to Kormangla. You can't extrapolate the same dynamics saying that if I are doing this volume, this throughput in Kormangla, we will do this in Yalanka, right?
00:35:28
Speaker
So, Bangalore alone is very different. So, that's also an humbling experience along the way, right? You raise your series B or series A seed, this is what you're doing in Bangalore.
00:35:40
Speaker
You think that I have 10 more cities that will follow. And then you land up in Mumbai. Mumbai is a different beast altogether. There is no, you search for Bangalore within Mumbai, you will not find anything there, right? From an economic standpoint.
00:35:54
Speaker
ah Same with Hyderabad. Chennai is like a very different beast when it comes to seafood consumption. So that was our experience as well. But the good thing that we did is I think as a company, we we expanded probably in in the fastest manner.
00:36:14
Speaker
We failed in the fastest possible manner. We were honest to say that we failed very, very quickly. And we rolled back as well in the fastest manner.
00:36:28
Speaker
So all of this 0 to 100 to 0 happened in almost 24 to 36 months. Wow. So you give me little bit timeline and define failure for me. When you say we failed, how do you define? So basically, we started this business in 2020 June.
00:36:47
Speaker
And by the early 2022, we were clocking close to $100 million dollars of throughput And you were supplying to like say a green chick chop or a I mean the green chick chop is a North Indian player, but like say a, like a modern bazaar and these kinds of stores or like like whom were you supplying? No, I think by the time we went to hundred million, we were playing across length and breadth. We were delivering to hawkers, wholesale markets.
00:37:16
Speaker
He went to a tier 2 city like a Mysore, a Coimbatore. ah So, we essentially did not leave anything to imagination. He went after every possible GTM.
00:37:29
Speaker
to essentially say whether we can make money out of this or not make money out of this. So, we did this in a span of, like I said, June of 2020, we raised our series of pre-seed capital.
00:37:41
Speaker
And over the next 18 months, we did all of this. And this was coinciding with the brutal COVID. And in the middle of COVID, we were expanding cities like there is no tomorrow.
00:37:53
Speaker
well And March 2022, we raised our no ah last check ah of $40 or $50 million at half a billion dollar valuation.
00:38:06
Speaker
And then it dawned upon us that, you know, actually, we have now tried all the GTMs. ah Hand on heart, we don't have a true business which can justify half a billion dollar valuation.
00:38:23
Speaker
And all the factors that can change this business model are not within our control. Actually, it's outside-in thing. Markets need to change.
00:38:34
Speaker
Counterparty risk profile need to change. Probability ability for customers to pay in terms of gross margin pool needs to change. Right? So, all of that hit us.
00:38:47
Speaker
And, you know, when we were really looking at it in know hard-nosed manner. And that also kind of coincided with the whole credit cost going up in the global market, capital squeeze happening, all that, right?
00:39:01
Speaker
So the onset of you know admission that we have failed here was the March of 2022. And after that was a year of unwinding, wherein we really stripped our business into pieces that we should retain, pieces that we shouldn't retain.
00:39:20
Speaker
and how we will monetize the pieces that we retained successfully and that entire shift happened over the next 12 to 18 months. And in summary that shift was essentially we retained the supply part of it, all the hard work that we had done on the supply aggregation we retained and we unwound, we pulled back on all the demand side activities in India and reoriented that resources, those resources, energies into demand in the US, Europe, basically the international demand.
00:39:51
Speaker
So it took us almost like a year and a half to move from $100 million India-oriented business to a point where we were $150, $200 million dollars global business and India being almost less than four five percent of this entire mix.
00:40:08
Speaker
Okay. I want to zoom in on some of the things you said just now. You admitted that you were not worth $500 million. dollars um As an investment banker, what is the calculation that you did in your mind to come up? Was it that we are doing $100 million and this is the expected growth rate and this is the net present value? Was it like that? ah How did you... You must have had some... No, see, I think it's not just in ah any any anything that you're valuing, right? And especially...
00:40:40
Speaker
ah a cash flow based valuation is about you having an expectation of certain cash flows, future cash flows and there is a risk ah profile for that cash flow basis. How risky is it in terms of translating this plan into reality?
00:40:58
Speaker
And when you discount all of those future cash flows by this risk rate, you arrive at a current valuation. right Now, when you project those cash flows, you have a bunch of assumptions.
00:41:14
Speaker
right The realization that we are not worth it is when those bunch of assumptions start throwing up surprises. okay right which starts affecting your future cash flows in terms of what you think is possible.
00:41:29
Speaker
What are some examples of assumptions which failed? I think the biggest one is, let's say we said the counterparty risk in India is ah something where if you provision 2%, you're fine.
00:41:44
Speaker
Basically, you go out and sell 100 rupees of seafood. 2% of that won't come back to you. and is a provisioning that will not come back because it went bad or because the it's because the customer is not willing to pay because the customer segment is a high risk customer segment okay it's not willing to pay and out of every 100 rupee that you do 2 rupee you may not come get back and what it's a classic lending discipline where you do a provision provisioning based on INPA provisioning based on
00:42:20
Speaker
the historical performance of that customer segment. so So what did that come out if it wasn't 2%? It came out to somewhere around 7, 8, 9%. Oh, Like 3x, 4x. So which meant that all of that that you would have built around, okay, what is the positive cash that you would generate at a certain scale, right?
00:42:40
Speaker
All of that broke down.
00:42:44
Speaker
And but why is there such a high counterparty risk? Is it normal? or it's not See, it's it's a function of how unorganized the market is. These are all fly-by-night guys.
00:42:56
Speaker
Like I said, these are newspaper on these are cropping up opportunistically. Right. If there is any issue with respect to their sales, typically they penalize their other listing.
00:43:12
Speaker
And here also is an industry where they don't have any investment in this channel. And there's no skin in the game. They can just disappear if it comes to it. um Okay.
00:43:23
Speaker
okay Okay. Okay. So this was one assumption which failed. or What else failed? One other is so you always think that, okay, you become extremely large ah and because of that, you will have so many curves of efficiency curves that you'll unlock.
00:43:42
Speaker
And that efficiency curves will also mask some of the disadvantage that you will have in terms of regulatory compliance with respect to your competition.
00:43:53
Speaker
Example, my competition unlikely to pay a PF ESI Unlikely to pay GST. Unlikely to pay, ah do the right thing when it comes to a lot of things.
00:44:08
Speaker
Whereas, we cannot build an institution with these shortcuts. We need to have. And these compliance costs adds up to a few percentage points.
00:44:20
Speaker
While yes, we had factored in that there are these efficiencies that will get unlocked at scale. It did play out. but it got sabotaged by this regulatory arbitrage that the competition had, ah which eventually meant that we really didn't have a distinctive ah competitive competitive position in the marketplace when it comes to the cost structure.
00:44:47
Speaker
That you will have this advantage because of which you'll get a disproportionate market share in the marketplace. ah So those are some of the assumptions that did not play out as initially projected.
00:45:02
Speaker
Okay. Okay. Got it. So how did you, ah ah you raised about $90 million dollars over ah four month period, like December 21, you raised $40 million and then March 22, you raised another $50 million. How did you raise so much money?
00:45:22
Speaker
Like it was the self-belief that you, you believed in the pitch and that worked for ah helping you raise this. No, I think, see, those were the markets that really, and those were the times where people actually had this belief that if you are able to capture market share, there will be ways to translate that into profit over a long period of time.
00:45:48
Speaker
And the horizon of that period was very long, given that there was an inherent positivity in the market. There was this whole underlying belief that there is going to be access to capital perpetually.
00:46:04
Speaker
right Because of zero interest rate. Zero interest rate period, perpetual access to capital. So which meant that when access to capital is very, very high, the growth assets are going to be fewer.
00:46:17
Speaker
So there is going to be a lot of capital chasing the growth assets. And we also are seeing the same tailwinds. We were doubling every quarter, which meant that, yes, um we were in the right spot and we attracted capital, not from, ah and of course, from some really marquee names.
00:46:39
Speaker
And that's what played out in those six months. Now, in March 22, when we started looking at, okay, what next? Now we have the GMV. What next?
00:46:50
Speaker
How do we translate this into margins? Here is where we are saying that, yes, I think it was a fairly, i would say, um ah very candid admission that while we got to the scale, translating that into margins may not be as efficient.
00:47:12
Speaker
Also, it's not like a point in time realization, actually. It's not that Mars 20, 22, one day just woke up and I realized that doesn't work, right? Start questioning some peripheral segments that you are in first.
00:47:27
Speaker
And then say, okay, let's ah ah let's get out of this. Let's focus on this. Now, when you get out of this, then you also question, how do i now grow from here?
00:47:39
Speaker
Then you start looking for a segment, which is an international segment. So you open something. Oh, then yeah, it makes sense. It's making more money. Then there is one segment which is making more money.
00:47:50
Speaker
Then you have in this domestic, you see still there are, let's say, five, six segments, which are not making sense, even as you grow. Then you keep stripping one after the other.
00:48:01
Speaker
right So, in a way, the way this evolved was around you keep stacking up on the international side because it made sense. And you keep deleting because it didn't make sense. And what helped in this kind of a ruthless prioritization is also the fact that there is no more capital coming away.
00:48:20
Speaker
You have to play with what you have. And when you have to play with what you have, you need to be honest about what will work.
00:48:29
Speaker
right In a way, I think if there was capital, more capital available to us, maybe wouldn't have done this rapid pivot or a hard pivot in terms of India to global.
00:48:42
Speaker
You would have still given some more chance, the India business. For all you know, it could still be around, but in retrospect, i can say, okay, now I've seen the profit that I'm making in the global market.
00:48:53
Speaker
There's no way I could have done that in Indian market. right So, it's ah it's ah it's in a way, it's something positive that worked out that capital became scarce and we had two were forced to make some choices to ensure that we have a sustainable business. And that's how the whole thing worked out. It's not a point in time that i woke up, decided. so this thing Now, when the whole things were buoyant, we were doing well, were scaling, were getting market share, were raising capital. So, that's how the $90 million dollars of happened.
00:49:24
Speaker
The good thing about us was that we realized that we need to change when there we had capital in the bank.
00:49:35
Speaker
Amazing. Amazing. ah You know, it's funny how it's constraints that define you rather than the abundance you have access to. It's so funny.
00:49:46
Speaker
ah okay So a lot of things that you speak about, i want to kind of understand ah the personal story of them. Doubling every quarter sounds...
00:49:59
Speaker
I mean, it sounds phenomenally hard, ah ah like like the kind of stuff which would burn out a founder, maybe. ah How did you manage that kind of growth of doubling every quarter?
00:50:12
Speaker
ah And then, you know, shutting down segments, ah which also can give a lot of stress to founders. a You know, how did you manage all of that?
00:50:24
Speaker
So this is a single founder company, Akshay. There are moments where I have really... um I regret that I don't have a partner here in this journey.
00:50:36
Speaker
Having said that, I think the mental model that I have of myself is like a soldier. I'm on this journey on my own and I've taken on this responsibility and I just need to deliver.
00:50:50
Speaker
And I'm also somebody who doesn't really think a lot about what has happened. I think a lot about what is not in your control. It's something that comes naturally to me.
00:51:03
Speaker
And all of that has really helped me stay sane in these know ah really hard moments. ah I think in a four, four and a half years, is what we have achieved incredibly proud of terms of scale, etc. In spite of having shut down, almost we and undid two years of hard work, one fine day and then we said we'll start off fresh.
00:51:27
Speaker
And in spite of that, where we have reached is is there. So, a lot of this comes from, so the thing in the thing that we have built out is definitely the speed.
00:51:38
Speaker
And that speed comes from clarity. right And personally, I think ah clarity is something that ah comes to you because of your relationship with some of the abstract things.
00:51:53
Speaker
right I'm sure a lot of them speak about the relationship with your body, your customers, your investors. oh Those are real things. I i don't ah need to go into it They're all important, but I don't need to go into it.
00:52:10
Speaker
But your relationship with the abstract things like your soul, your money. What's your relationship with money? What's your relationship with time? Right, concept of time.
00:52:25
Speaker
I think some of those help in terms of making some of these hard choices in a very clearer manner where you're not double guessing yourself, right?
00:52:37
Speaker
So coming back to my own principles around some of these abstract things, when it comes to money, I fundamentally feel that a superpower of anybody who is in the business of taking risks
00:52:54
Speaker
comes from what some people call as, you know, a few money, right? yeah yeah yeah hey And it has two sides to it One side is that you increase the numerator.
00:53:11
Speaker
The other side is that your your denominator is so low. that you can say, i don't care. So i um denominator is how much you spend every year.
00:53:26
Speaker
So like say, exactly I need 20 lakhs a year to spend or I need 50 lakhs a year to spend. So if you reduce 50 to 20 lakhs, then your money can last you longer. So your FU money amount needed is smaller. So that's what you're saying. essentially, that's where I'm saying that as ah as ah as a guy who is in the business of taking risks,
00:53:46
Speaker
if you are able to be a mass Spartan, right, your ability to take risks goes up. Compounds. Oh, yes. So true.
00:53:57
Speaker
Right? So that's the relationship with money. That is very important. Right? Second is... What was that number for you? the The amount you need to survive every year? See, honestly, I don't even own a car, Akshay, today. That's how basic and minimal I am.
00:54:15
Speaker
And I think today, today ah if you give me 50,000 rupees a month, I will survive. Wow, amazing. and That's my superpower.
00:54:28
Speaker
Amazing. yeah I can travel in bus, I can travel in train. Even today, I travel in auto rickshaw. Basically, if I want to go from point A to point B, I don't need a welfare.
00:54:39
Speaker
I can do with anything that is there. so right So that, I think, has allowed me to have a risk profile Which allows you to do something that we have done this Captain Fish. Right?
00:54:52
Speaker
Second thing is your own relationship with yourself. Right? How do you see yourself? I've always seen myself as a work in progress project. Right?
00:55:04
Speaker
Of course, you need to have a very high bar for yourself. But you also need to be okay to let yourself fail and learn.
00:55:17
Speaker
And say that whatever is done is done. Let's focus on the future. ah Basically treating yourself as a project rather than an end state.
00:55:31
Speaker
And being true to that. Right? Right. And the third thing is I think are your own relationship with the time as a concept.
00:55:42
Speaker
Right. I always so think this that, you know, as you know time, right. You have a choice to be a cow or a lion.
00:55:52
Speaker
A cow is basically like you have a calendar and you have these things marked out in your calendar. And you are basically going from one block on that calendar to the next block.
00:56:05
Speaker
You're basically grazing, right? you have ah You have a piece of land and you graze. Okay. Right? Or you work like a lion, which is basically you love something.
00:56:17
Speaker
It doesn't matter whether what you do is 10 minutes out of entire week or one day out of entire week. And you decide, okay, outside of that, what you do, you pause. But you go for that large outcome
00:56:35
Speaker
moves, right, which are make or break, but it will help you sustain. So, as a company, as a person, have been somebody who is on the latter side, who was believed in doing these big high impact, fewer things, which are make or break high risk stuff.
00:56:57
Speaker
Versus setting these cadence and saying, okay, I'll do 10 review meetings in a day. I'll go from one calendar block to next and I'll graze like a cow. Yeah, okay.
00:57:07
Speaker
And that's how I treat my time. Time and effect, right? So some of these personal choices have also helped or rather played a role, right?
00:57:19
Speaker
Obviously, this is not prescriptive. It's not the same for everybody. just my personal style.
00:57:28
Speaker
Do you work like 70-80 hours a week? Or is it that when needed, you will work 70-80 hours a week? As you said that... When needed, I can do anything. ah okay When needed, I can do anything.
00:57:41
Speaker
If something is exciting, it's almost like if you take my last 12-13 years of professional career, I worked the hardest in the last 3-4 years. Simply because it's an ah adrenaline rush that keeps me going.
00:57:59
Speaker
It is not because there is a money that is riding. It's not that. it's just that it's It's just exciting. It's just all raw energy coming to the fore when you're doing what you're doing.
00:58:15
Speaker
like There is this concept of hard work. I don't think you ever question whether or work-life balance. You ever question ah that, oh, Michael Jordan put 100 hours a week.
00:58:26
Speaker
to get to where he did. Or Virat Kohli did 100 hours. That's not controversial, right? You expect that that's natural because he's top of his game. He needs to be there. But I don't know, for some reason, entrepreneurship, work, you know, doing a day-to-day stuff, if you're putting 40, anything north of 40, 50, 60, you're toxic and you're seen as somebody who is twisted, right?
00:58:48
Speaker
ah But if you love, you do it. And if you love and do something, you are off the chart. and It plays out in every other aspect of it.
00:58:59
Speaker
yeah yeah Yeah, that's a good way to look at it. Amazing. i think okay So, ah you know, coming back to the journey. So ah how did you do the global expansion?
00:59:11
Speaker
Like, I mean, you told me in the line that we shut down many India businesses and we started opening many global opportunities. But how did you actually go about finding customers, signing them up, convincing them to buy from an Indian company?
00:59:26
Speaker
I'm sure India doesn't have that same reputational advantage which an Norway has, for example. you know ah How did you actually crack your global go-to-market?
00:59:37
Speaker
So I took the riskiest path to crack the global market. I went and acquired companies. Wow. Okay. The advantage of having cash in bank and also the fact that when you are frugal, you can take big risks. so So both of these coming together, cash in bank, ability to take big risk. Amazing. And going all in, right?
01:00:00
Speaker
oh ah Going all in, having the clarity that this is the move that will make or break my company.
01:00:12
Speaker
And I am fully convinced that this is the only move. I bet my entire cash in the bank. There was a moment where I was transferring this money that I had to um to a company that was buying.
01:00:25
Speaker
It happened to be where I was on the flight from Chicago to Dubai. And I was entering the password. How much so was the amount? The amount was $49 million. Oh, wow.
01:00:39
Speaker
Oh, wow. Wow. Basically, if I had got that move wrong, like that moment wrong, you know that was the end of Captain Fresh.
01:00:50
Speaker
Right. So, which is what I said, that we have played it like a lion. but ah It went after four or five tectonic moves, which redefined the trajectory of Captain Fresh.
01:01:07
Speaker
In hindsight, they have worked out very well. But when we were in the thick of that, there are many other reasons why we maybe we were sane, maintained composure, we said this is the right thing, we had clarity, we went about it. Right?
01:01:25
Speaker
So to your point, we shot search we we basically did the riskiest thing that one can do in expansion. We went and did a bunch of acquisitions, not one, a bunch.
01:01:38
Speaker
And yes, I think today we have landed safely. I can safely say that today we have landed with our feet on the ground. ah I don't anticipate any turbulence, so to say, fundamental turbulence at the platform level from here on.
01:01:59
Speaker
ah Just take me through these four or five ah big shots you took, big swings you took, each of them, like again with the timeline. So one of the biggest swing that I wanted to take, we were at 25 or 30 million dollar, maybe a sub 50 million dollar business, like even before ah the March 2022.
01:02:21
Speaker
ah When I started thinking about the global expansion, move the first company that we wanted to buy had a scale of 950 million dollars.
01:02:35
Speaker
Their revenue, annual revenue. Revenue, $950 million dollars revenue amongst the top five distributors in the US. And I was very clear that we should go after that acquisition.
01:02:48
Speaker
well right And spent a lot of time. In fact, I spent one year. I spent one year to go after that company. Initially, it was a hard task for me.
01:03:01
Speaker
to convince that we are a credible buyer to the sellers. And like I said, for me, it is one problem at a time, one tough problem at a time. And I give it all. Like I go all in.
01:03:14
Speaker
I convinced. Then we went, we started raising money to stack up to do that. But that coincided with the market going south in terms of capital raising.
01:03:26
Speaker
ah so so we could not complete that transaction. Oh, okay. Okay. But in the system, we set the bar at 920 million, 950 million in terms of the size of the swing.
01:03:43
Speaker
yeah After that, we got an asset which was 350 million, which was for all practical purposes, it was two, three times our size still. Yes.
01:03:55
Speaker
The swing was, at least for a lot of stakeholders, a manageable swing. Right. but okay That's what happened. And like I said, in a lot of these, it's a most contrarian thing that you could think of. But finally, it comes down to logic, numbers, a plan, execution plan, identify, clearly identifying risks.
01:04:20
Speaker
having ability to articulate how we manage those risks, right? And ability to take the stakeholders along in a very genuine, sincere, and honest manner in terms of how I am thinking about it, right? How ah my with all my intellect, I believe that is the right thing to do for Captain Fresh.
01:04:43
Speaker
It comes down to all of these no small building blocks, which if you ask me, is no different from a relationship with an employee relationship. How you how do you build a relationship with anybody? It is a set of small, genuine, sincere conversations, which is backed by rational logic data.
01:05:05
Speaker
That's what I did. Amazing. um what What are these assets priced at? Like you, this $950 million dollar company? Typically, we pay 7, 8, 9 times EBITDA.
01:05:19
Speaker
That's what we used to pay when we were a nobody in this industry. Now we are looking at am mid single digit 5, 6, 7x types. As we are becoming more and more prominent buyers.
01:05:35
Speaker
Hopefully, as we go to the next stage of our lifecycle, we hope to streamline that pricing even better. And what is the EBITDA margin of these distributors? Like say that 950 million? Typically, mid single digit percentages.
01:05:49
Speaker
Okay, okay, okay. so So when you were trying to acquire that business, ah this was around that, after that March 22 raise of 50 million, you wanted to do one more raise to acquire that.
01:06:01
Speaker
Correct. And that because the interest rate ah turned, so you were not able to raise and so you went after smaller targets. So so yeah what what were those targets? Just talk me through the profile of each one, the 350 million ah ah revenue company which you acquired. What did it do? Which area?
01:06:18
Speaker
How did it help you? So these guys were one of the top ah brands in the US packaged um seafood market. ah These guys, typically if you walk into any tier 2, tier 3 retailer in some of the large cities in the eastern corridor, you will find a brand in the freezer.
01:06:39
Speaker
Also, these guys were very strong on the food service side. So a casual dining chef or a fine dining chef ah typically has a choice in terms of what brand of seafood product you would want to buy.
01:06:56
Speaker
So they were amongst the top three, top four brands in their target markets. So what we got into was, like I said, ah what we buy into are two things.
01:07:07
Speaker
One is relationships with the customers because we believe that as an Indian player, we will not be able to establish that relationship in a short period of time.
01:07:20
Speaker
Second thing that we buy is a reputation or a track record. which hopefully we can leverage that to add more and more products ah to ensure we get higher wallet share within those relationships.
01:07:35
Speaker
ah So in case of what we bought in US, there are 4,000 distributors who distribute to the universe of restaurants, not just seafood, but everything around sea, say around a plate, in the plate, everything.
01:07:50
Speaker
And we service close to 1,000 of those 4,000 customers through these brands that we acquired. so that's our strategy in the US, which is largely around going after food service market.
01:08:04
Speaker
In Europe, the strategy is different. There are strategies to go after retail because ah the seafood consumption is over-indexed on retail channel in the US, in Europe, where almost two-thirds of seafood gets consumed through retail versus in US, two-thirds gets consumed through food service.
01:08:24
Speaker
So, in the European market, our strategy been to… Food service means restaurants, right? Like… Food service is restaurants. Okay. And everything else. Food service is out of home, is restaurants, is your institutions, even your jails and schools and hospitals and oh god all of that.
01:08:45
Speaker
In India, this is called Horeca, right? that Yeah, in India, it's called Horeca. They refer to it as out of home consumption. ah Retail is at home where you take it to your quick kitchens and cook.
01:08:58
Speaker
So in Europe, at home is the 70% segment. In US, out of home is a 70% segment. So our strategy in Europe has been to move. Yeah, but despite everything, I'm really enjoying the conversation. I just love how analytical you are about things. It's amazing.
01:09:20
Speaker
So, ah you know, you gave me this analysis that, okay, in US, 70% of market is food service and Europe, 70% of market is retail. Was this ah something you analyzed before your acquisitions or you figured out ah along the way after your acquisitions? the Oh, this is how this... like Like, how did you learn these things?
01:09:42
Speaker
So, I have a method to this madness. When I wanted to expand... I did this 40 city trip to US ah where every day I would visit two cities and within each city I would get to at least 10 different retail stores.
01:10:07
Speaker
and So just start with that. but I like that term of method to the madness. So in terms of this whole market expansion, the global side, at least to arrive at a mental model, I had a method to this madness.
01:10:18
Speaker
The method was that I used to travel. So US, when I said US, I traveled to 40 cities. And 40 cities, almost two cities a day, every city I would go to at least 10 to 15 different points of consumption, different types of retail, go into their seafood aisle, understand the composition of the shelf, fresh versus is frozen, which origin is the product coming from, raw versus value added.
01:10:49
Speaker
And I did that over 40 cities in a matter of almost one month. wow great And when I did this, I used to take down all the names of the suppliers and things like that.
01:11:02
Speaker
And in parallel, we had got Bain to do a research for us, which is give me a complete market scan of what's the segment, who are the which are the hotspots, etc. right In fact, I think when as a startup, we have used these large MBBs very, very generously.
01:11:23
Speaker
as a startup because for me, if I am not armed with data and clarity, right, it is just a compulsive disorder. I just cannot go in. And it's the same thing in Europe.
01:11:34
Speaker
I went to five cities in Spain across the cross-section. Like if you take Spain, I went to Madrid, Barcelona, Valencia, Seville, Malaga. It's a representation of all tiers of cities.
01:11:48
Speaker
I did the same in Italy. in In France, I went to five cities. And in each of these, I would go to a wet market, go to a a retail setup. So when after two months, when I reflected on this entire what I have seen, and by that time, even the market research report was ready, which was a top-down analysis,
01:12:12
Speaker
Right. Then is the culmination of my strategy in terms of which team I need to have in my global listing and in what sequence. The fact that US should be a food service, Europe should be retail and the sequence should be Western Europe, Central Europe, Eastern Southern Europe.
01:12:32
Speaker
The fact that these are the brands that I should go after. This is the species that I need to go after. This is the value addition that I need to go after. Like I start with cooking. I will go into a smoking.
01:12:44
Speaker
And then I'll think of portioning or any other form of value addition. Right? So the entire thing was put together top down.
01:12:55
Speaker
And then when the acquisition idea started coming to me, It was easy for me to decide like I say no in five minutes. Because I clearly know what I don't want.
01:13:11
Speaker
So it is that clarity. That's what I said in the beginning also. If there's one thing that differentiates our journey is the speed and speed is because of clarity. Amazing, amazing. You are a data processing machine. the The way you went after that data, to seek out the data, irrespective of what it costs you, and it obviously costs you, I mean, you you would have probably stayed away from your family. We spent like, I think, five, six million dollars just on market research, honestly. And for a certain amount of our size, it's a substantial number.
01:13:43
Speaker
Yes, it is. And I don't regret any of that because the kind of clarity and speed that it has given us, The only reason why we are in a span of four and a half years, not 20th largest player in the world comes to see food.
01:13:58
Speaker
Wow. Wow. You know, there there is this popular narrative of the hustle culture and you need to hustle. I think possibly a better narrative is to seek data and make, you know, seek clarity rather. better That's one thing I've learned. Keep going back to cow versus lion, right?
01:14:17
Speaker
It's not mindless hustle. yeah It's about reflecting, thinking, and when it's needed, high intensity, you know, life depends on it kind of a move.
01:14:31
Speaker
Yeah, you need to be a sprinter instead of looking at it as a marathon run. You need to take sprints when you spot opportunities, basically. Yeah, that's at least our playbook. I'm sure it's not everybody has it's their own way of doing things.
01:14:48
Speaker
oh Amazing. You've not spoken much about how you build supply. So ah all of these acquisitions were essentially distribution channels, right? Correct. ways to get product from India into the western shelves but product from India itself would not be a non-trivial problem so product from India is not a non-trivial problem and if there is one part of the equation that I solved in the first 2-3 years of our journey that I could continue to hold on to it's the supply side
01:15:21
Speaker
And that itself was a journey, again, not well documented. ah To give you example, ah d ah the unlock of how ah the marine supply chain works in India.
01:15:36
Speaker
The way I learned about it, like I used to go and sit in these railway stations and then look at the way the products are moving, which station to which station they are moving.
01:15:47
Speaker
So typically, if you take a thermocall box in a railway station and that carries fish in a parcel, they have a three-digit code that tells which station it is going to. That's the code of the station, two station, and a three-digit code from where it is coming from.
01:16:03
Speaker
And on top of that, there will be a supplier's code, which is another three, four digit code. right i had I used to go and sit in this Bangalore and Chennai railway station and mark out all of this. So kind of getting a network graph.
01:16:18
Speaker
of how the marine supply chain in India works. So in Bangalore, how many different ah trains carry this and from which all stations it is loaded and then start peeling off. Like for example, ah from Tamil Nadu, Tutikorin comes. Tutikorin I see as a higher frequency repeating thing.
01:16:39
Speaker
Then I would go back to Tutikorin. And then in Tutikorin, do the same exercise. Then go back to the supplier. So that's the exercise that I did over 3-4 months. now The point I'm making here is ability to learn about the supply chain in a first principle way was important for me as an organization.
01:17:01
Speaker
Otherwise, the other method would have been that I will get somebody from the industry and rely on their knowledge base and rely on their sharpness of their insight to be able to devise my supply side strategy, which I was not comfortable with. wanted a truly comprehensive way to be able to say there's nothing outside of what Captain Fresh knows about seafood in this market.
01:17:31
Speaker
Once I learned this, I put 20 people on the job almost. To be able to do this across all permutation combination of railway stations, suppliers, mapping out, yes, this is how the flow of seafood happens from the source to the market.
01:17:51
Speaker
Right? So that gave me a method to this madness. And you won't believe we have done this in Madrid. We have done this in Barcelona. Right? As we speak, we are doing this in markets like Fulton in New York, where teams sit there and do this mapping in terms of how does this supply chain unravel on the back end, right? So this, we mapped the entire stakeholder set.
01:18:17
Speaker
This is just one example of how we've gone about it. Just to give you a sense of how unorganized this is. There's nothing, no research in this industry, right? There's nobody who's going to come and teach you how this works.
01:18:29
Speaker
But after that, yes, so the two things I've worked, one is obviously the India playbook that we did. Second is my own experience as an exporter, ah being part of Nekenti, seeing those operations. So this whole beast as a factory operator and an exporter is something that i learned previously.
01:18:51
Speaker
by being part of that company. So, put the one and two together, which is farmers, fishermen, sources, not data gathering, plus how a factory works.
01:19:02
Speaker
ah That's how I put the supply side game together. And supply side is all organic. We don't do any acquisitions on the supply side. It's all organic. ah So this how I stitched together the tropical landscape. So we I did travel to Vietnam and Indonesia.
01:19:18
Speaker
So I have lived almost 200 on an average, 200 to 250 days in a year.
01:19:25
Speaker
On on on on the road over the last four a half, I guess. On an average. Mm-hmm. So today, if I am a leader in seafood, understanding how these global corridors intersect and operate, it is because of the brute force of me having seen all of these nodes with my own eyes and reflected upon how, why some things are structured the way they are.
01:19:54
Speaker
Fascinating. ah So from what I understand, you are getting supply from India, selling to the West. that Why are you mapping in other countries? Like why are you mapping in Spain? No, by the way, supply from India is just 25% of our supply. Today we are a truly global supply, global demand.
01:20:12
Speaker
We also source from North Atlantic, land the likes of Norway, likes of Faroe Islands, likes of Denmark. So this has unraveled on both sides, both supply and demand. It's unraveled into a global platform.
01:20:25
Speaker
Okay. Okay. What was the reason for that? Just to increase the top line, you need to be able to supply more. See, of the things that I learned when I was doing this whole roadshow for one of the companies that I was listing is that the biggest downside of operating in fish and seafood industry is the predictability of cash flows.
01:20:47
Speaker
And that predictability of cash flows is a problem simply because you're operating in an act of court category. So the moment, this ah the for you, the surface area is the surface of earth.
01:20:59
Speaker
As much as you're spread out on the surface of earth, you increase your luck in terms of being predictable. If you constrain yourself to a certain corner of the world, let's say Indian coast or west coast of India, your luck or bad luck amplifies to that extent.
01:21:15
Speaker
Hmm. Amazing. ah Do you have more time? Okay. So, you know, ah early on in the conversation, you spoke of ah the fact that in investment banking, you did not feel like it was a compounding choice. ah I want to kind of understand what you mean by a compounding choice, how that principle has played out at Captain Fresh's
01:21:44
Speaker
See, when I say compounding, there is one compounding in terms of you have learned certain skill, you have gathered certain knowledge and then you have built something basis that and that what you built is creating value for you over and over.
01:22:04
Speaker
Right? In investment banking, the marginal cost goes down. but Like say, if you're a SaaS company, you build a good software. Good software for good compounding, right? Yeah, every additional license costs you $0, basically. $0, but you know you keep adding keep earning whatever. Anything that you build actually adds value, right? Whether it's software, whether it's business model, the business process, anything.
01:22:26
Speaker
Whereas in business, in investment banking, what I saw was you're as good as a deal that you are part of. And when you start the next deal, yes, of course, you have ah you have your talent. Basically, it's yourself which you have invested in. You are a good better banker.
01:22:43
Speaker
But you're actually as good as the deal next deal that you can execute. hey The second part of this compounding is the operating leverage. The only operating leverage you have as a banker is your time.
01:22:57
Speaker
right you' right Right. Whereas here, you have 100, 200, 500 people's time operating on your vision. And that compounding you have a share of.
01:23:08
Speaker
right So that's the thing that I thought that if you have if you are on of if you're on this whole intellect ladder, you are anywhere at the top of the thing when it is investing or banking or any of these idea-based businesses.
01:23:24
Speaker
But if you add leverage to it and the element of building to it, maybe you can create more value. Yeah. Okay. Okay. Understood.
01:23:35
Speaker
Have you used this principle at Captain Price in terms of doing things which have a compounding effect? Absolutely. i think we think about it all the time ah in terms of what are the things that compound for us.
01:23:49
Speaker
Obviously, anything that is any investment in tech, any investment in doing something which we are very different compared to the existing player in the market or anything with respect to ah training a certain set of people.
01:24:07
Speaker
right Anything that adds to a um competency set. o okay As much non-linear as possible. That's like a wish list. Linear is good, but if non-linear, then even better.
01:24:19
Speaker
We would love to, but honestly, know, it takes time to discover all of this and put these pieces together. But I think we have a fair share of these compounding elements in Captain Fresh, which is what makes it unique.
01:24:33
Speaker
What is the headcount of Captain Fresh? We are around 340 350 people. That is amazingly lean. And what revenue do you expect to do current financial year? ah Current, we should be around, we are at our hundred around $640, $650 million.
01:24:51
Speaker
But we aspire to be around a billion. In the next three quarters. So you you are doing like $2 million dollars of revenue per headcount. That is phenomenal. That's something that I truly look at, honestly. And I think in the AI-induced era, that number should be at least three to four times that what where we are.
01:25:13
Speaker
How do you do that? I've i've hardly heard of companies doing $2 million dollars of revenue per headcount. Like that's phenomenal. I think it's a ruthless thought process, which is around...
01:25:28
Speaker
Should I be the guy doing this?
01:25:31
Speaker
Is there anybody else who can do equally better or better than us?
01:25:38
Speaker
If the answer for the latter is yes, then let me not do it. Give me an example. Like for example, factory production. Today in the market, there are many players who do production.
01:25:51
Speaker
Like there is a B2C player who does their own production. There are a bunch of circles. But we said, no, we are not the best in doing production. We are the best in laying out the SOP for production.
01:26:06
Speaker
Right. I don't want to optimize anything fancy in terms of my metrics. If I have to let go that margin, I'm okay to let go of that margin. I don't want to showcase that margin to net of all the costs and finally arrive at the same net margin.
01:26:20
Speaker
Okay. Okay. Right. Being ruthless about it. No, I don't want to do it. This is my value addition. My value addition is i am like the HL of this industry or a Britannia of this industry.
01:26:31
Speaker
I will set define. And I will deliver the demand that is needed. I will create a tech which will ensure that they're delivering consistent, high-quality product to us where we can monitor on a real-time basis.
01:26:44
Speaker
But I shouldn't do this if it's not worth our time. Simply because I can add headcount to my company, I don't want to handle all of this process which can be handled by other stakeholders equally competent, in an equally competent manner.
01:27:01
Speaker
If you had raised more money, would you still have been as ruthless? like like you So what you're saying is you don't operate any factories. All your processing is third-party vendors, but you it is ah control the quality. It is a very, would say, interesting question, Akshay.
01:27:15
Speaker
I honestly think that if we had, if the 2021-2022 bull run had continued, ah the natural state was to arrive at where I am today.
01:27:29
Speaker
But that was a state where you are playing for the gallery and you would have continued to play without really, know, going after your natural instincts.
01:27:43
Speaker
Not having capital allowed me to express my natural self saying that cut all the bullshit out. Let's do what I do.
01:27:55
Speaker
um he Amazing, amazing, amazing. How do you manage people? I mean, you know, you you come across as so analytical in every decision. I'm wondering how you are as a boss.
01:28:10
Speaker
Would my conversation with you as a boss be all about numbers? How how would you like how are you as a boss to work with? How do you inspire your team? See, I think, ah which is why I also want to have fewer people around me. I'm not a people's guy, Ikshay. I'm not a guy who can get on a stage and inspire a people with a battle cry.
01:28:30
Speaker
and I can't use any flowery language like we are doing a revolution and all that nonsense. Right? So I am a very, very practical, numbers-oriented, simple guy. So I can't really mobilize a mass for a moment, right?
01:28:46
Speaker
Which is why I am designed the way am. I have 24 direct reportees. I have a very flat organization. I have a team that has only maybe two levels below that. Very shallow in terms of depth from a a structure standpoint.
01:29:00
Speaker
And i am able to at least directly interact and I'm i'm very good when it comes to one on one communication because finally it is about ah ah ah rational conversations, logical conversations.
01:29:12
Speaker
And that's what I have ah relied on. And I also tend to attract similar type of people who don't like too much of nonsense, ah no politics, no bureaucracy.
01:29:25
Speaker
It's just business and yeah people who enjoy that kind of a setting. ah that's That's how I have managed with my own set of limitations of being super rational, analytical and ah know having you know having to motivate people through the corners and cycles that we have gone through.
01:29:47
Speaker
yeah how do you manage 20-25 people is this a factor of ah very very selective hiring and therefore whomsoever you hire you have blind trust on them or like yes that is true I am very very selective in hiring and when you are doing only these many hires like I hire one or two people a year at this rate of growth right ah I end up spending a lot of time pre-hire ah Second is, so I also think that the paradigm of managing relationships has changed thanks to asynchronous communication, WhatsApp led, right? Sort of rules that, you know, the org design rules that our previously discussed
01:30:33
Speaker
written in the previous era, right? ah Synchronous communication and things like that are not very valid. I fundamentally believe that ah flatter organizations are the tool for speed and with today's paradigm technology communication setting, it's more a norm than an exception.
01:30:54
Speaker
ah you can do it. It's not necessary that you need to have too many layers and too much of concentration of power under you and all of that. Amazing. Amazing. Let me end with this question. ah You know, what's your advice to ah the listeners who aspire to be founders?
01:31:17
Speaker
hu so Of course, there's many um many aspects to this. ah But I think having a very large purpose ah is extremely important.
01:31:34
Speaker
ah Don't become a founder because you want to become a founder. ah Have a purpose or have a mission or have a problem statement.
01:31:46
Speaker
And let that excite you to become a founder because you won can only fake it to certain extent. Finally, the reality and that authenticity of building something comes from that, you know, what you are solving for, the purpose that you're going after, which lets you wake up every day.
01:32:05
Speaker
And even in those moments where you feel that you are dripping in blood and you are there getting punched, in the ring, right? You still think that you're loving it, right?
01:32:18
Speaker
It's life and you love it. That is basically coming from the power of purpose that you're chasing and the problem that is exciting you. If that is not the case, if you're becoming a founder for the no glory or glamour and all of the nice things that are there, you may not sustain the punches.
01:32:38
Speaker
you may not sustain the the punches So I want to kind of point something out here. I think you became a founder because you saw the TAM here, right?
01:32:49
Speaker
I agree with you. Yeah. So ah the like once you became a founder, then you discovered the purpose and found the passion? Purpose is the impact, honestly.
01:33:00
Speaker
TAM is the impact. See, essentially for a middle class boy like me, ah To be able to deliver or do something which is impactful, which is creating so many jobs, which is doing something, right?
01:33:13
Speaker
That's the impact and that's the purpose. And it's the analytical way to arrive at that is stamp. Right. Okay. Am is a symptom of purpose in a way. yeah is enough But the fact is that ah for a guy who comes from a family who no clue about business, for me, this is something that I can never lose.
01:33:36
Speaker
I will do everything to protect this thing. Because I feel this is a once in a lifetime privilege that I've got. And that is impact. That is legacy. Right.
01:33:46
Speaker
You should have one or two of those drivers that is beyond the ah short term things. When are you likely to do your unicorn round?
01:33:59
Speaker
No, I don't think we'll do an unicorn round and it's natural. It's also a responsibility, right? Like actually I'm almost gone to a point where being a unicorn is a massive responsibility.
01:34:10
Speaker
Questioning yourself that, okay, used really that. ah For all you know, it may happen in a public market where it's a natural discovery of valuation rather than you saying, calling yourself a unicorn.
01:34:22
Speaker
It's just, you have delivered a set of cash flows which a wider set of brains decide that the valuation is that.
01:34:32
Speaker
I just want to say that ah I recorded an episode with Uttam exactly a year ago. I checked in my calendar. It was in January last year that we recorded originally.
01:34:44
Speaker
So um we couldn't release the episode at that time. There was an IPO ah which was on the cards and you your legal team advised against the release. ah But now ah we are going to release that episode and it only makes sense to update that conversation with the what's happened in the last one year since we spoke and if there were missed opportunities in that conversation, although i like really enjoyed the conversation when I re-heard it today.
01:35:15
Speaker
um So Uttam, first give me an overview, like what's the, and before we actually get on to the business part of it, I just want to say that you are looking much leaner than ah when we
Personal Health and Work-Life Balance
01:35:30
Speaker
recorded a year, right? I'm sure the audience members will also see that. What the but was that like your resolution of the year or something like that?
01:35:38
Speaker
No, it wasn't the resolution of the year. Thanks so much, Akshay, by the way. I'm super happy to be part of this conversation again. ah So coming back your question on the fitness, not necessarily part of a resolution or something. I would say um it's slightly a little bit more broader.
01:35:55
Speaker
ah There was a point in time. So I'll tell you a bit, right? Like in terms of my travel, I was just doing the numbers yesterday. I have traveled 1.8 million kilometers in the last three years.
01:36:08
Speaker
And 1.8 million kilometers so kind of ranks right up there. Like Elon Musk has done 750 kilometers a year, 750K kilometers a year. And a typical Fortune 500 CEO does 2,500, sorry, 250,000 kilometers a year. So I'm like three times.
01:36:31
Speaker
And this year, doctor advised that, look, if you continue to do the same, ah You are putting your body at massive amount of risk. ah And um ah I barely remember the number of nights I had slept for like continuous five hours um because of really horrible circadian rhythm.
01:36:56
Speaker
So it all kind of came together that, look, we are on a journey, which I think I'm really enjoying. But this entire journey, the only vehicle that we all have is our bodies.
01:37:08
Speaker
And somewhere, you know, it was it was a culmination of all of those parts where my
Financial Health and Return on Capital
01:37:16
Speaker
cholesterol, everything was off the chart and I really had to ah fix things.
01:37:23
Speaker
And thought then if we fix, then let me go to the... end of it, like really get to the best version of myself, which is 10, 11 percent body fat with six pack and lean muscle mass and all of that.
01:37:37
Speaker
So that journey started like two years ago, two and half, three years ago, I would say I was weighing 94. Now I weigh 63. I was at 40 percent body fat. Now I'm at 14 and a half, 15.
01:37:50
Speaker
But I think the best part is I sleep eight hours easily, which I had never done. ah Like my average P sleep score for the year is close to around 90, which is unbelievable.
01:38:03
Speaker
And my sleeping heart rate is like 47, 48 with a HRV of 65, 70. So I kind of rank in the top 1% male for my age group with respect to these biomarkers. So it's amazing how, you know, and just a six month ah or a one year effort in terms of ah everything, nutrition, recovery, everything can really fix the body.
01:38:29
Speaker
ah ten It's amazing how powerful your body is. Incredible. and That is so inspiring. ah So, OK, give me these kind of, so you just gave me some stats, like 14 and a half percent body fat and you have ah how many hours of sleep, et cetera. Give me similar stats for the health of Captain Fresh.
01:38:54
Speaker
Captain Fresh, see, I think um I couldn't have been more pleased with how far we have come. um We clocked around 3,500 crores of revenue last financial year.
01:39:10
Speaker
This financial year, we are on our way to clock close to around ah five five we five and a half fish thousand crores of revenues. We have already cropped close to two and a half thousand in the first half.
01:39:27
Speaker
ah We delivered an EBITDA of 125 crores last year. ah That I think is going to be anywhere between two and a half to three times, close to two and a half to three times in this financial year, FY26.
01:39:45
Speaker
But more importantly, ah if you look at our run rate revenues for the coming quarter, ah we should be north of 10,000 crores. ah So ah next year, FI27, we're looking at close to 10,000.
01:40:03
Speaker
So if you look at the trajectory, FI24, we did 1,300. FI25, 3,500. FI26, 5,000. FI27, 10,000 touchwood. thousand three hundred if i twenty five three thousand five hundred i twenty six five thousand if i twenty seven ah ten thousand touchu And if you look at the EBITDA trajectory, obviously are making like couple of hundred gross losses in FY24. We turned profitable in FY25 with 125 gross.
01:40:28
Speaker
And this year, like I said, we should be anywhere between 300 to 350. And next year we should be anywhere between 700 to 750. So it's ah it's it's something that not many people know in terms of ah how large the business has become.
01:40:46
Speaker
ah It's when I sit back and see, you know, a beast of a global packaged food company where we sell in our own brand. ah We have a market leadership position in pretty much all the channels that we operate with.
01:41:03
Speaker
ah We are turning out to be a very strong um luxury protein ah platform focused on the US and Europe, ah closer to north of a billion dollar in terms of our size. So that's how far we have come as a company, as Captain Fresh.
01:41:23
Speaker
So yeah, that's that's broadly the health of the company. I think the one other thing is so not many startups talk about return on capital employed. So we have delivered, I think, in FY25 and FY26, we are at an age of 20% with non-capital employed and we should be at around 27-28% in FY27. So, yeah, I think that's something that I'm super proud of.
01:41:52
Speaker
and know In a matter of six, seven years, you could create a platform of this size, scale and property. what What does that mean, return on capital employed? Like if you've raised 100 crores and you are making a profit of 20 crores, so that's return on capital employed, very simplistically. Yeah.
01:42:10
Speaker
Very simplistically, it's not about the race. If you have if i deployed 100 crores of capital in the business, I'm making 20 crores of capital return. So which means that the moment you are written on capital employed is more than, let's say, 12-13%, which is ah by and large, that's the opportunity cost of most of the investors.
01:42:31
Speaker
ah If you are in the range of 20-25%, it only means that it's easy for you to get access to capital, theoretically. Because your return on capital employed is by far higher than the and opportunity cost of most investors that you promote.
01:42:50
Speaker
So ah what's behind this 10,000 crore run rate? 10,000 crore means like more than a billion dollars of run rate.
01:43:00
Speaker
What's behind this? Because you did tell me how you started shutting down the India business. It was a very hard market. ah Is this all on the back of acquisitions? Yeah.
01:43:13
Speaker
Yes and no. Acquisition is definitely has played a role. So I think stepping back, ah if you look at the industry, industry is a $600 billion dollars industry. But where the opportunity lies is there is a trillion dollar kind of balance sheet this industry carries. Like if you take all the players in this industry and add up all their assets, current assets, everything, it's north a trillion dollar.
01:43:42
Speaker
um But the opportunity is that it's extremely fragmented. It's like across like millions of companies, like the largest company is just 1% of market. ah So that's the opportunity.
01:43:56
Speaker
Now in that opportunity, if you see similar such industries where other tech first players have really gone after and disrupted, ah you will see that whether you take an Amazon or an Uber or a Airbnb.
01:44:11
Speaker
Let me take Uber as an example. ah They have basically taken a similar trillion dollar balance sheet, which is like these small car owners across the world and brought them on the platform and then really funded their customer acquisition pipe for almost, I would say, 25, 30 years equity.
01:44:32
Speaker
ah from equity And then over a period of time, that has created a platform, which is supply and demand connected.
Growth through Acquisitions and Technology
01:44:40
Speaker
So they invested in digital tools and customer acquisition.
01:44:44
Speaker
So similarly, there is DoorDash. There's all of this, right? DoorDash is for restaurants, million or trillions of restaurant investments. Similarly, Airbnb is for these houses, trillions of them across the world have gathered.
01:44:57
Speaker
So if you see our playbook is not very distant from that playbook. The only difference is that in our case, we chose for customer acquisition part, we chose inorganic.
01:45:10
Speaker
ah Only reason is that and we are are operating in a B2B environment and in a B2B environment, especially in the US and Europe, reputation is a massive currency that you need to have. And if only it only builds over a period of time.
01:45:25
Speaker
So if we choose to build a reputation organically, ah it is going to take a lot of time. And I'm not even sure if it is economically very, very efficient.
01:45:36
Speaker
Basically, what I'm saying is if I organically build this business today, is it going to be cheaper than me acquiring the business? That's a question mark. Including the execution risk, my business,
01:45:52
Speaker
Conclusion is that it is not, which is why we went out and acquired these customers. So today what we have is around 1500 very high quality premium customers in ah ah US, which we acquired.
01:46:09
Speaker
And when we acquired the wallet share of those customers for less than 1%,
01:46:18
Speaker
So the opportunity for a platform like us, given that we have really scaled up our supply in a very asset-like manner, is to be able to cross sell different products into those relationships.
01:46:32
Speaker
That is the growth that is playing. So if you see F25, F526, F527, yes, we continue to acquire new customers through acquisition. But the ones that we have acquired already, we continue to deliver higher revenues per account.
01:46:50
Speaker
Now, everything that we deliver for the same account almost comes at zero incremental costs as far as my distribution is concerned. Because the biggest cost that I have is sales guy and the sales cost is per account.
01:47:06
Speaker
And it's the same ah cost that... works for you. And the only thing that we have managed to do is essentially bring in technology to be able to help the sales folks manage the cognitive load of managing plethora of SKUs.
01:47:24
Speaker
Otherwise, each species that we introduce into the platform is around SKUs. So you can think of the cognitive load that sales guy has if there is no technology player.
01:47:37
Speaker
That's our value addition, which means that we reduce the friction of sales for these sales folks to sell their product into the accounts that they've been working with for like 15, 20, 25 years.
01:47:49
Speaker
So that's what we've done. So that is what is playing out in this world. So I would say... ah In the incremental revenues ah in between FI 25, FI 26, FI 27, FI 25 to FI 26, 80% organic.
01:48:03
Speaker
f i twenty five to f five twenty six it's eighty percent organic But FI26 to FI27, there is a decent amount of inorganic because we did one more spurt of ah acquisition, which as we are in the process of closing those acquisitions in this quarter, ah which is why this 5,000 to 10,000 crore jump, I would say almost 4,000 is inorganic.
01:48:28
Speaker
Hopefully, FI28, where we don't plan to do an inorganic, this base will work for us to keep increasing that revenue. Okay, so I'm going to summarize my understanding.
01:48:43
Speaker
Essentially, you're building the pipes for seafood trade globally. And ah one part of the pipe is supply, the other part is demand or getting access to customers. So what you're saying is that ah To organically go and build the demand side is not worth it. It is much cheaper, faster, better to just acquire existing companies which have relationships with customers.
01:49:08
Speaker
ah And then since you now you have that pipe going to that customer, in that pipe you can send more species. Maybe that company acquired was only selling tuna or whatever, XYZ, shrimp, something like that. Now they can also sell tuna plus shrimp plus salmon plus... BASA plus whatever other species. um Therefore, it is overall a value-accretive acquisition because ah that company now has a much bigger portfolio of products to sell and those relationships are getting leveraged better as ah as a result of being under the Captain Fresh umbrella.
01:49:45
Speaker
Absolutely. So I'll give you two more data points there. One is um um the company that we acquired, one of the first acquisitions. we have managed to triple their EBITDA in a matter 24 months.
01:50:03
Speaker
ah And these are not on a small base. Now, when we acquired EBITDA, it was like $13-14 million. It's on that base we are talking about.
01:50:14
Speaker
ah And that has happened because we managed to grow that revenue from 350 million when we acquired today, I think around 480, 500 million in a matter of six or eight quarters.
01:50:28
Speaker
and this growth the incremental gross margin has not costed much for us. So essentially whatever incremental has also flown through to the EBITDA.
01:50:41
Speaker
The second thing is that in terms of the supply side we yeah We had actually used our first two years of existence to create these digital still pipes on the supply side. right While on the front end, it's more physical pipes. That's the relationship, hard relationships that we are acquiring.
01:51:02
Speaker
On the back end, it's more the digital pipe that we had created. And very interestingly, one unique thing that we did is we created these pipes trying to work with the cheapest species in the world.
01:51:17
Speaker
Most of the volume that we were playing with or experimenting with while you know creating these digital pipes, it could be fish gram, it could be FAS, all of these tools that we created.
01:51:32
Speaker
We had rohu, katla, tilapia, basa. These are all sub 80, 100 rupee species that allowed us to experiment and iterate and really create that.
01:51:45
Speaker
Now when we acquire a distribution, we went out and acquired, but when we acquired distribution, we went out and acquired the most premium of distributions. Like in the US for example, we are very strong in luxury protein segment.
01:52:07
Speaker
We have our pipes going into the topmost Michelin star restaurants and fine dining and casual dining restaurants. And there we are selling crustaceans, which, you know, if you see the crustaceans, they are like the king of any luxury fine dining. Crustaceans like lobster, crab, these kinds. Crab, XSL, XXL shrimps, which is like really large, juicy shrimps.
01:52:35
Speaker
10 crabs, 10 lobsters, right? So that's the distribution that we acquired. And because you're already at the top end, it is allowing us to really cross sell different products into that distribution.
01:52:50
Speaker
Similarly, we acquired smoked salmon, which is again at the higher end of the the protein stack on the retail side. Now we are doing a couple of acquisitions, which is one on very high end tuna, very premium tuna, which uses similar stack access to the premium customers.
01:53:11
Speaker
So what we did is now we are able to sweat the supply side pipes, the digital pipes that we had created on the back of a very premium product, which is going into ah top end of the market.
01:53:25
Speaker
That is allowing us to really scale faster ah on the front end. So these acquisitions would also give you supply side synergies, right? Like if you are acquiring a company which is selling smoked salmon, then obviously it has built that supply chain of sourcing salmon, of smoking it through a plant in the in a plant or something, ah packaging it. And now that product can be ah distributed through all the acquisitions or all the portfolio companies.
01:53:56
Speaker
Yes, yes, yes. Supply side is definitely a scenario. In fact, the way I look at it is acquisitions are my path to get relationships, whether it's the customers or it's the ah sourcing side partners.
01:54:14
Speaker
What Captain Fresh brings to the table is a digital wrapper around these relationships on the front end. with the customers or with the backend, with the suppliers.
01:54:26
Speaker
And what these digital wrappers will do, essentially provide non-linearity for scaling. When we were doing one product to 10 products to 50 products, it just happens with lowest amount of friction on the front end.
01:54:43
Speaker
And on the back end, if I want to go deeper into the operations and start looking at how do I unlock more value out of every ton of product that I move, again, the same digital wrapper will help me go deeper into the supply side.
01:55:01
Speaker
So that's the way I look at doing this in terms of going after existing relationships because this is an industry which is a low trust industry.
01:55:12
Speaker
For natural reasons, because the industry is so complex, ah the stakeholders generally have a very low trust. So for an insurgent like me to go and disrupt an industry, I can't do it entirely.
01:55:31
Speaker
afresh I need an existing base of relationships and then build on top of it. I feel that that's a smarter route than thinking and assuming that I will do everything afresh. And some of them have tried and failed in our space as well, which is why almost in this whole global fish and seafood, new age company space, we almost are like the last man standing today.
01:55:59
Speaker
ah but Why are you the last man standing? What what happened to the other companies? So there were a couple of other large similar companies. In fact, they had raised more capital, largely from Indonesia that had come out.
01:56:13
Speaker
ah But they had tried, one is I think one of them collapsed under the weight of misgovernance from the founder side. But that misgovernance also had seeds in the strategy that he had followed, which is completely organic, which is a very high friction path.
01:56:31
Speaker
Right. And which means that initially it looks very, very ah promising, but as you scale, the friction only compound compounds. But the assumption is that as you scale, the friction comes down, which is not the case.
01:56:44
Speaker
And now that is what led to that founder along the misgovernance path. That's my read of it. So it was almost like a billion and a half, I think, in terms of market cap, having raised $400 million. dollars Now I think they are almost like a write off situation to now.
01:57:02
Speaker
So they seem like the most credible um ah competition to us at a global scale. There are a couple of others similarly. There is one called Hooser in Europe, which also got kind of shut down. They were invested by Google and SIS.
01:57:18
Speaker
Similarly, they also tried everything organic. ah So if you look at various geography, I think Europe had a couple of them, Asia like we and couple of them in Indonesia.
01:57:29
Speaker
ah most of them they are really not at the scale and health that we are at. So yeah I see the logic for the organic part. Now you're saying that ah you are digitizing the supply chain.
01:57:50
Speaker
um It would be very hard to digitize supply chain when you acquire a legacy business because they may have legacy software. So that whole change management process, both in terms of the technology, the ah people receptiveness or changing people's behavior to adopt new technology, et cetera, et cetera, all of that sounds um like its own battle.
01:58:19
Speaker
Actually, interestingly, it is not that complex as it sounds, Akshay, because of the way this industry is wired. This industry is, to begin with, is very low tech, which means there isn't much of chain management that re we go after.
01:58:38
Speaker
And most of the pieces that we acquire, particularly on the demand side, is essentially people. That's truly the competency set that we get.
01:58:52
Speaker
And their relationships. It is not necessarily a very operations heavy business that we acquire. It's not like I need to integrate trucks operations and warehousing operation.
01:59:07
Speaker
No, none of that. So because of this, we in fact today are quite successful in bringing so all of these companies onto our platform on day minus one.
01:59:22
Speaker
Like during the process of acquisition.
01:59:29
Speaker
we end up working with a lot of these folks to bring them onto our platform. In fact, the day they come onto our platform is like the days here when we sign the deal, wire the money and go to the end stage.
01:59:43
Speaker
So what we have done in Captain Fresh today is I think we must have done eight to 10 deals so far. That is now a cookie cutter process.
01:59:56
Speaker
I have a team whether it's legal, HR, systems, data, like our data team start taking the supplier master, customer master, SQ master, start streamlining into the master that can start talking to us.
02:00:14
Speaker
So it's it's like completely automated templatized setup in terms of how we go about doing this. ah And now I think slowly we are baking that into the ah screening process itself, that we screen the companies for pursuing acquisition, which also kind of fit well into the Captain Fresh Flyer platform a lot more seamlessly than where we were.
02:00:44
Speaker
See, I think if you look at the platforms like what we are building, we are not really new to this kind of an idea. There are several such large companies that have created massive amount of value building something like this. There is a company called Danaher.
02:01:03
Speaker
which in fact, at least we are following the theme that it is seafood and it's only front end and only US Europe. They are a very diversified setup. I think their business is built only across this competency of buying a company and fitting it in. They have something called TBS, which is Denahar Business System.
02:01:24
Speaker
which is a proprietary engine that is there, I would say core of if they are today at $30 billion dollars kind of market cap company. Why? Because their DBS works and that DBS is essentially like a management consulting arm, which is doing a HR, a legal, ah everything goes into a situation, refies the effectiveness, comes back, takes on the next part, right?
02:01:51
Speaker
Like that you will have plenty. Like you won't believe Accenture has done 200 plus acquisitions. Accenture is a powerhouse of roll up driven play, a Glencore, which is on the mineral side.
02:02:06
Speaker
So if you see a playbook where there's a cross cell at the center of it, right?
02:02:15
Speaker
You will see roll up as a, like Glencore, for example, you have an iron ore, you have a coal, you have You can imagine a similar seafood type of a n cross n matching with customer relationship as a bottleneck.
02:02:33
Speaker
Right? These kinds of things lend themselves for a acquisitive player and the companies that are successful end up codifying the overall M&M playbook.
02:02:46
Speaker
templateizing it so that incremental risks are lower. Like we are already at that point. Like any acquisition that we today are pursuing, the incremental acquisition is less than maybe 10% our revenues at a platform level.
02:03:04
Speaker
And that 10% is only going to go down. I think by the end of FY27, I think we will be at like 2-3% every incremental acquisition or maybe 5%.
02:03:15
Speaker
um and So, which means the incremental risk that M&A brings. is going to drop drastically and our ability to digest and absorb that also improves with every acquisition.
02:03:30
Speaker
So it's a very thoughtful intent-driven playbook. It is not a one-off where you know we kind of merge two beasts and then we're taking a risk of how the M&A synergies, integration, all of that cultural piece plays out. No, we are not. You're actually a platform with that at the core of it and obviously the supply side, which dids fits into it.
02:03:53
Speaker
So a little bit off topic, but staying on the M&A, like amenability to M&A, why did the Thrasio model fail? Like I believe Thrasio is this e-commerce roll up.
02:04:07
Speaker
ah therefore on an expert in ah I'm not an expert in that Thrasio model, but I'll tell you as a banker, Why M&As fail?
02:04:19
Speaker
M&As fail largely because of three reasons. One, you misprice it when you enter.
02:04:32
Speaker
Actually, that means you overpay what would it be that is of the problem
02:04:40
Speaker
and when do you overpa you overpay when you're having massive amount of competition for that deal.
02:04:52
Speaker
Second, you have a wrong capital structure or you go over aggressive. So one is you overpay. Second, you back it up with very, very romantic business plan, romantic synergy case and an aggressive capital structure to go after.
02:05:11
Speaker
Aggressive capital structure would mean you take on debt to fund. Absolutely. And that debt then comes with interest payments. and Okay. Absolutely. Third, you think you're the hero in terms of saying that I will run this business better than the current set of guys. So I will do the market change.
02:05:32
Speaker
And I will deliver now multiple times revenue, multiple times EBITDA. oh right Like a founder or a guy who is buying a company's God complex sets in when he was aggressive on all three dimensions.
02:05:50
Speaker
He pays a higher multiple. Basically, he wants to be the guy who walks into the most competitive deal and say, look, I'm the dude, I won the ticket.
02:06:01
Speaker
yeah Second, I back it up with like 70% debt and 30% equity.
02:06:11
Speaker
Third, I feel I am the hero. I can run this business smarter than the guys who have done it for 10, 15, 20 years. I'll come in and change everything.
02:06:22
Speaker
As a banker, I feel if M&As have failed, it by and large falls into one of these three buckets. Maybe Trasio did all three of them.
02:06:35
Speaker
how How did you avoid ah these three cents? We do none of it. How do you avoid overpaying? We only do deals where there is no competition.
02:06:49
Speaker
Okay. we are No competition means there is no pressure to overpay. We take almost 18 months to close a deal.
02:06:59
Speaker
That should give an indication that it's almost an unbanked, uncompeted space. which also is an advantage because there's nobody like us. So in you do deals with no competition because you have people who are good at hunting out and doing cold outreach?
02:07:18
Speaker
No, the incumbents are not structured to do a playbook like us. There are by and large two types of incumbents. There are five or six very healthy companies which access to very, very strong cash flows.
02:07:36
Speaker
But they are in a space where their shareholders are used to taking dividend out.
02:07:43
Speaker
And they're focused on one species and fully vertically integrated. So to make a case today after 30 years of existence in that look, I'll now be a multi-species. I'll do all of these acquisitions, etc, etc, etc.
02:07:56
Speaker
They may have do it. But today I don't see them changing their strategy. What are some of these incumbents? Can you give me some names? A Movi, a Leroy, a Salmar. These are all mostly Scandinavian. Which countries are they from? like Mostly Norway.
02:08:12
Speaker
Okay. So these would be like the salmon guys from Norway. um There might be some Japanese guys also here in seafood. The second bucket is Japanese. Again, they kind of fall into the similar bucket.
02:08:24
Speaker
But I think between the Norwegians and Japanese, Japanese are relatively more acquisitive. But I think we can out-compete them on speed. There are many places where people prefer us over Japanese. no japanese Thanks to their structure, they're very ah they're very slow in their deal making and that plays to our advantage.
02:08:46
Speaker
The second and large book is largely the know family managed businesses. The biggest handicap of this industry is the industry doesn't know how to raise equity capital.
02:09:02
Speaker
Which comes to the second part. If you don't know how to raise equity capital, then you are funding it by debt, which are essentially, you are having much higher risk that you are playing for.
02:09:16
Speaker
you You have funded through equity 100% or have you taken debt? All our acquisitions have been funded through equity. But you have not raised... i I pay very, very competitively. 100% is equity financed.
02:09:35
Speaker
hu Third is where we have really done well. Zero management change. In fact, I have got the management to reinvest in Captain Fish.
02:09:49
Speaker
So when you're paying them, you're getting them to buy into Captain Fresh equity. Absolutely. That has been the deal that we have done. Okay. Amazing. So, yes, it seems like I have gone around buying companies.
02:10:04
Speaker
But truth is, I have gone around selling Captain Fresh talk.
02:10:12
Speaker
Okay. That's where all my effort goes in. Hmm. Hmm. Hmm.
02:10:19
Speaker
If there is fundamentally such a massive overperformance, Captain Fresh, which now you're seeing people realize, it's because I have bought them. i have sold our vision to them.
02:10:34
Speaker
They have reinvested in our vision.
02:10:39
Speaker
So these 10 odd acquisitions you've done, what has been the total value of all 10 combined? I think we would have paid like 120, 130 million dollars out of which around 65, 70% is cash and balance is equity swap and cash is 100% equity, equity money.
02:11:04
Speaker
So, about 174. So, roughly it's like sub-20 million average deal, like the value of company. can't say that because one deal was fairly large, the first one, because you wanted the base. What was that? What was the worth of that company? That was a $75 million equity deal, where 15 odd was equity swap and balance was cash.
02:11:27
Speaker
Okay. Okay. So, okay. I mean, you've not raised as much money as like 175 million. So, this you're able to do because you're giving them equity. So, it's not about how much you have raised because you're not giving much cash. So, exactly we have raised that thing about 200 million cash.
02:11:48
Speaker
oh Of which a last part or not last part, but some part of it would have been spent in the India strategy, which you originally started. We did that experimentation, all of that. So I think clearly, let's say in FI 27 or FI, we are, let's say around 50 million EBITDA business or 60 million EBITDA business.
02:12:08
Speaker
I don't think you have any other startup example where there is $200 million in capital and in a position to deliver a 50 million EBITDA.
02:12:19
Speaker
Yeah. Yeah. As in there are 38 companies or 35 startups that are listed in the stock exchange. I don't think there is any example of this order.
02:12:30
Speaker
Yeah. Yeah. Yeah. yeah Phenomenal. Amazing. um Okay. So, ah okay. I understood how you are making the M&As work. I want to understand what exactly is this technology platform, which they are adopting? Is it like an yeah ERP? What is it that these companies adopt?
02:12:51
Speaker
So on the demand side, like I said, we have We have basically acquiring the relationship, which is customer who knows our sales guys.
02:13:03
Speaker
And every species that we bring on board has 500 to 600 scales. Imagine you're on a call with the customer and then You have now inventory of 10,000 SKUs.
02:13:18
Speaker
ah And as a sales guy, one is you have not done these 5,000 SKUs. ah You don't understand the nuances of it. But you're pitching to the customer. So what we have done is a tool. It's like a sales cockpit.
02:13:33
Speaker
It's almost like I almost say that that we are trying to give a Ferrari to our drivers with all the sophisticated and you know levers, which gives them a very nuanced view of what their customer wants.
02:13:50
Speaker
ah And then, of course, armed with very high quality supply and inventory. That's like the, I would say, the hygiene of this platform. So that's one layout, which is on the... So that would show them, for example, all the SKUs, what is the delivery time for each SKU? It's a recommendation engine, actually. It tells them that what they need to pitch to the customer.
02:14:11
Speaker
Okay. So we have like dumbed it down saying that we just need to... but And it's only obviously improving over time with more data, etc. etc. etc
02:14:23
Speaker
Similarly, on the back end, we have built a factory digitization tool, ah which today can go into a factory and look at profitability at ah a batch of raw material level.
02:14:42
Speaker
Now, what this enables us to do is, enables us to access this factory bandwidth, which is, let's say, they do five or six activities. It could be freezing or cooking or whatever that is. right Now, there is a capital investment that is needed to do this.
02:15:03
Speaker
Now, if I have to share that capacity with me, I should be able to say, oh, look, I brought this material. I used it for so and so time. And this is the output that I've got.
02:15:14
Speaker
And I'll pay you for so and so time. and So I have variabilized the capacity. And to be able to do that, I should be able to track at a unit level. The economics at an unit level. And that unit in the supply side is raw material batch.
02:15:33
Speaker
What is a raw material batch? One raw material batch is typically, let's say if I talk about shrimp, it is one farm getting harvested and the entire batch coming to a factory for processing.
02:15:44
Speaker
And these are all third party factories. You don't own any third-party factories. I don't own anything. So which means that now I have the front end demand. I can go to these factories and suck the excess capacities and deliver my tech and my raw material and say that, look, I will track the economics as per what I'm giving you and I'll pay transfer.
02:16:07
Speaker
So that way I can dip into the manufacturing side of the margins. without owning the factory.
02:16:17
Speaker
And because it is a species agnostic play, and also it's not region agnostic or language agnostic. I can do this in India. I can do this in Vietnam. I can do this in Indonesia.
02:16:29
Speaker
I can do this in Philippines. I do this in Denmark. I do this in Europe. So the whole world supply
02:16:39
Speaker
becomes your you know, top of the funnel. So you have the demand. Now you have the ability to get into the manufacturing side of the demand.
02:16:53
Speaker
so That's the second. Yeah. good These companies you're buying don't have any factories. These are these are all like ah trace that on just customer relationships. That's what you're buying.
02:17:05
Speaker
In Europe, you have some processing because Europe market is slightly different. ah Europe does ah almost 70-80% of what Europe consumes is in the ready to eat, ready to cook.
02:17:16
Speaker
So we need some last mile value addition in Europe. So we have a factory in Paris, in ah Poland, now we're buying something in the in Barcelona, ah we have something in Denmark. So this helps us in last mile value addition, but the input to them comes from Latam or ah Asia, ah which is similar to what I was describing, which is the input to US and Europe similar, just that Europe, there is one more leg of value addition before it goes to the customer.
02:17:50
Speaker
Okay, got it. um Your sourcing ah it originally was largely
Creating a Global Seafood Brand
02:17:58
Speaker
India, right? Like the the ah initial. So what what is the sourcing now? What's the split? Like how much of it do you source from India? and I think India is now around 10%.
02:18:08
Speaker
Okay, so 90% of what you source is outside. um Yeah, I think second largest could be Norway. Okay, for salmon. And then we have Vietnam and Indonesia and Mexico.
02:18:22
Speaker
ah And these are our top six countries. I think we source around $850 $950 million dollars worth of products where, like i said, 80% of this will come from these six countries.
02:18:37
Speaker
Which in a way, I have Indian Ocean, which is India, Indonesia, Vietnam. Atlantic Ocean, which is Norway and Poland. And Pacific Ocean, which is Ecuador and Mexico.
02:18:49
Speaker
That's roughly how we have our tentacles today in these. ah But I think the key is that today, for example, from Mexico, I source a tuna largely.
02:19:01
Speaker
ah ah So there is opportunity for me to expand other species there. Similarly, India is shrimp play. There is more that I can add. So that's what I described on the front end.
02:19:15
Speaker
In a way, we'll also work on the back end. We have a long tail of countries that we work with as well. We work with Australia and New Zealand and South Africa for lobsters. We work with New Zealand for, again, Hokie.
02:19:28
Speaker
um and We work with Sri Lanka. We work with Honduras, Colombia. So they're more like 25-watt countries, which kind of contribute to, I think, maybe 20% of our overall supply.
02:19:39
Speaker
So that's the supply mix. And you're largely a B2B supplier, so which means you're selling like white label product in a way.
02:19:50
Speaker
No, we sell in our own brand. We only sell in two parts. Either we sell in our own brand, whereas the chef of the that Michelin star restaurant friend knows that he wants to order a Sensi shrimp.
02:20:04
Speaker
Okay. Or he knows that a Mexican... But Sensi is not a consumer brand. It's a B2B brand. Like chefs would know that Sensi is a... It is also in some tier two retail stores.
02:20:16
Speaker
Like if you go to a tier two retail. And when I said tier two, these are city level retail stores. They have maybe 20 stores. Which as a segment is much smaller in the US.
02:20:28
Speaker
Who don't have the scale to source their own private label streams. Ah, okay. Otherwise, like a Walmart and all these would have... Walmart, they their own private. The big boys label.
02:20:42
Speaker
Okay. Yeah. So that... And you would be selling to a Walmart also? Or Walmart has its own supply chain? walmart ah We do sell to... In that retail stack, we are now closing an acquisition which sells to Acme, Safeway,
02:21:00
Speaker
ah couple of rice choppers, like not year two, but between that, not a big boy, but between that. So we are getting there.
02:21:14
Speaker
Walmart is, yes, we would like to work with them, but eventually at some point. To your point, yes, we we are somebody who could be relevant to them as well. Not necessarily that we run, ah there is nothing that we can offer to them.
02:21:29
Speaker
So you were saying that there are two ways in which you sell. One is our brand. yeah That is mostly to the food service side. 100% of our food service business is in our brand.
02:21:40
Speaker
Okay. Or we manufacture private label. Hmm. for the retailers that works mostly in the ah you you know European side, okay ah where we are the private label partners.
02:21:57
Speaker
ah they They give all their product specifications, we manufacture for them in their label. We are now getting into our own branded business. So if I talk about, let's say if I do this podcast, hopefully two years, three years later, I should be talking a lot about Captain Fresh branded business that we have built globally.
02:22:17
Speaker
We are just getting ourselves into our own brand. So in a way, where the way i had envisioned this is yeah like five years ago when I started that this is a commodity.
02:22:32
Speaker
And the commodity is about scale. And the foundation needs to be hence supply chain. I think at a billion dollar scale that we are, maybe as we move in four, five years, we should be four, $5 billion. dollars We have built that foundation.
02:22:50
Speaker
And on top of this foundation is where we now can start thinking about the brand. And the the thesis is very simple, Lakshay. Actually, I live in Amsterdam now.
02:23:03
Speaker
I walk around on these ah ah retail aisles. I think except for air that we breathe here, I'm not exaggerating, except for air that we breathe here, okay everything else, they're trying to put protein in it.
02:23:20
Speaker
yeah I am not exaggerating.
02:23:26
Speaker
Anything that goes into your body here has some protein in it.
02:23:35
Speaker
What actually makes me feel bad is in this entire protein revolution, Seafood is like a stepmother. It's like a side actor.
02:23:46
Speaker
You walk into a Humboldt or a Albert Heins here next to next to my house. Seafood is lying in some corner, or some old frozen this thing in terms of where there is a dairy, the chocolate and the chips now which are all protein embedded and they're all flashy and are in the packaged food section.
02:24:06
Speaker
Seafood is in some commodity. and I feel there is an opportunity there. today In terms of really doing justice to what seafood is as a protein. Like in my journey today, like a year ago, I would not have talked so passionately about it.
02:24:25
Speaker
In the last one year, if there is one product that has helped me come this far in my journey, right? To even think that I would have a six pack was impossible. i was, you know, you should see the pictures of mine two years ago, right?
02:24:42
Speaker
Seafood is a big play in that. Wow. Because if you have to control your calorie intake and maximize protein,
02:24:54
Speaker
Seafood is the best product in town. There's this Silicon Valley term you might have heard called dog fooding, like eat your own dog food in a way like if you're making dog food, then you should be eating your own dog food. So you're literally doing that.
02:25:09
Speaker
Yes. am literally doing that as an afterthought because it's almost like I discovered as a customer. ah i have I have a trainer here who kept pushing me that.
02:25:20
Speaker
And then when he realized that I actually run a seafood company, I was like, dude, What is it asking you to educate about your own product to you? Yeah, yeah, yeah. So coming back to the thing that I see a huge potential for brand at a global level.
02:25:36
Speaker
But now This would be a consumer brand. Like you would start selling direct to consumer on retail. Not direct to consumer. No, no. I mean, we not direct to consumer, but through retail chains with your own brand. don't believe in direct to consumer.
02:25:50
Speaker
Yeah. oh like no In India, you have ITC or whatever. There are lots of other brands yeah which are selling. Basically, I want to be the innovation champion in this category.
02:26:03
Speaker
Like if I step back and see, given the structure of the industry that we are in, if you compare our industry's R&D budget and ah dairy industry's R&D budget, our meat industry's R&D budget, we don't compare at all.
02:26:21
Speaker
Which is why I'll tell you an example. Let's say for example, there is something called beef jerky that you get. Yeah. maybe All kiosks here you get.
02:26:32
Speaker
That is actually a staple protein source for a lot of them on the move. ah Basically, they have made a snack out of this product. Yeah.
02:26:43
Speaker
Because they have obviously worked on product stabilization, shelf life, packaging, all that. And this all a function of how much capital you have to experiment on our end. na Our industry doesn't have that because the incumbents are very small.
02:26:58
Speaker
To give you a sense, the largest player I have in this industry is $6 billion. dollars Whereas the largest player in poultry is $50 billion. In beef is $80 billion.
02:27:09
Speaker
In dairy, it's $40 billion. but In fruits and vegetables, there is a dole. In grains, there is 100.
02:27:18
Speaker
it Just the largest guy's R&D budget could be higher than my entire industry's R&D budget. ah What that means is you make this thing compound over 10, 20, 30 year period, you realize that why our category is so primitive. Why being, I am the stud in protein.
02:27:40
Speaker
Literally. I am the king. I am the dude. But I'm thrown in some corner in a retail chain ah because the industry insiders don't know how to sell it. That's why a chocolate or a potato chips today is faking itself to be the protein champ.
02:27:58
Speaker
yeah yeah And appearing cool in front of customers. And this I'm not talking about India. I'm talking about Amsterdam. Yeah, yeah, yeah.
02:28:09
Speaker
Amsterdam is amongst the top five cities. In fact, it's the top city when it comes to health aware population. The percentage people who frequent four to five or 200 minutes plus gym time.
02:28:24
Speaker
One of the highest in the world. Right? So the most savviest of demand, my industry is failing.
02:28:37
Speaker
Wouldn't ah this bring you in conflict with your buyers? Like if you are white label supplier to retail chains, then you also start doing the same product. Okay. okay Which is why I have brought the point of R and D.
02:28:53
Speaker
If I do the same product, I don't have a business doing it in my own time.
02:29:01
Speaker
It's a waste of my time. Got it. Okay. ah Tell me something. You live in Amsterdam. 90% of your sourcing is outside India. Probably 95% of your revenue will be outside India.
02:29:13
Speaker
ah Why do you want to list in India?
02:29:18
Speaker
We are an Indian company. My critical capabilities are all based in India. it It just so happens that you are an Indian, therefore you hired your core team in India, right? Otherwise... Why are GCCs coming to India?
02:29:34
Speaker
Talent. Exactly.
02:29:39
Speaker
Second, let me talk about the top 10 seafood companies in the Everybody started from some country, they have to.
02:29:50
Speaker
Yeah. yeah right At scale, what is the home country's contribution, whether it's on the supply or demand for each of them? and Not really. like it's That's the nature of the beast.
02:30:06
Speaker
I can't change the topography of the earth. ah India can contribute if I need to be an all-weather supplier to my customer.
02:30:19
Speaker
I need to expose myself to three oceans.
02:30:24
Speaker
And in each ocean, if I need to be an all-weather supplier, I need to go into all coasts.
02:30:32
Speaker
Naturally, India becomes maybe one of the top four suppliers in india Indian Ocean. I can't change that.
02:30:43
Speaker
The sourcing mix will be what it is. And if you look at demand side, if India was rich, obviously would have made sense for us to stay back in India.
02:30:55
Speaker
And having said that, I truly believe In the next 5 to 10 years, we will definitely come back to India. Right? Because my theory is very simple.
Global Seafood Market Dynamics
02:31:07
Speaker
In India, then the consumer categories that have been created, the players needed to have the ability to be the last man standing. Right.
02:31:19
Speaker
Whether it is a Kellogg's, whether it is even your, you know, bone meters and boosts of the world.
02:31:28
Speaker
any of these category creation that's happened in India. That way, you know, B2C businesses have a lot of ah share of voice. But if you really look at share of profits,
02:31:42
Speaker
which is why we today At $200 million dollars can speak of 50 million profit. I let you do the research. You take the top 10 VC startups which have gone after B2C businesses and what is their EBITDA profile.
02:31:59
Speaker
now You should strip out the treasury income. yeah site right So coming back to the point, India is important for us, will be important for us, but we are now just following the return capital employed as a framework and going after customers, which makes sense.
02:32:17
Speaker
And our ambition is to create that cash cow outside of India. At least that's what we will do in the next four, five years. And it's a billion and a half people out there.
02:32:28
Speaker
If they start consuming, honestly, there's going to be very less fish outside for others. And that has already played out in China. while China's emergence on the seafood market has been a tectonic shift in the global seafood landscape.
02:32:45
Speaker
In what rate?
02:32:49
Speaker
So since China used to be a net exporter of products 10 years ago, I think maybe 12 years ago. Today, it's one of the largest importers of products. China consumes close to $100 billion dollars worth of seafood.
02:33:03
Speaker
India consumes like 10 maybe.
02:33:08
Speaker
If India's 10 goes to 100 on pro-rata basis, even more, even our population is slightly higher, there is no supply in the world to cater to that growth.
02:33:19
Speaker
Right. So, a world has barely managed to absorb a China. If India lands up, it's not going to be as easy.
02:33:32
Speaker
You're not doing anything in China. Again, the margins are not that high. No, I am very focused on US and Europe because ease of doing business. One that I realized is, ah like I said, unknown unknowns, you can't have those many unknowns.
02:33:50
Speaker
ah Whether it's China, whether it's South Korea, whether it is Japan, ah we are staying away from these three markets from a distribution standpoint. Okay. Do you ah think about macro...
02:34:06
Speaker
ah concerns, for example, global warming, for example, tariffs, are these taking a lot of your mind space or you feel like there is a ah there is a lot which ah without these concerns, there is still enough headway for you to grow just through consolidation. So these are not really big concerns.
02:34:27
Speaker
See, if you look at my origin, right? Used to be an investment banker, wanted to get one of the seafood companies listed. So I went out in the market to do the roadshow for them.
02:34:39
Speaker
ah Faced investor scrutiny on the business model that I was trying to pitch. And the business model that I was trying to pitch was basically one species, one origin, just from India, mostly going into the one market, which is US.
02:34:56
Speaker
largely profitable, very, very healthy profits. But the questions were around sustainability of that. And my single biggest lesson out of that entire stint was that if you have to convert a commodity business like seafood into a packaged food business, the driver is predictability.
Diversification and Adaptability
02:35:22
Speaker
And if predictability is the driver, The input for your business is it needs to be diversified. And diversified is a across three vectors.
02:35:34
Speaker
Species,
02:35:38
Speaker
origin, stroke, demand.
02:35:42
Speaker
Third is vertically integrated. You have an ability to play a role at the customer level and an ability to play a role at the farming or fisheries level. So this...
02:35:55
Speaker
design choice is at the core of Captain Fresh. Now this design choice is so timeless in its effectiveness that it can withstand tariff,
02:36:11
Speaker
it can withstand any of the other things that we talk about, currency, there is a war that's happening, so Suez Canal is blocked. Panama Canal is blah, I don't care because at the core of it, I can dial up, dial down any of these corridors that we operate in a matter of hours to weeks. right So that's at the foundation of
02:36:46
Speaker
Our entire thing. That's why, you know, US tariff happened. I don't think I mentioned we continue to grow, continue to deliver profit. We'll continue to do it. Venezuela is just now. Actually, when you saying somebody, some investor asked me, what's our exposure in Venezuela?
02:37:03
Speaker
$1 million worth of seafood from Venezuela out of my $960. I just messaged. Wow. So that's the that's the design piece that we have managed to do at the core of it.
02:37:19
Speaker
Actually, very few people understood though the, I would say, the depth of this thinking before you were staffed. I thank Mr. Trump for having done whatever he has done in a very obviously I don't mean it but whatever he has done because he has brought out the beauty of our business model because now you can choose low tariff ah countries to sell products from we did that we did that in like 45 days in fact we played front foot we doubled our inventory in the US
02:37:58
Speaker
yeah Every small guy didn't have the ability to play the way we did. Right. So to guy i'll give you one number, for first six months of this year, ah Asia used to be two-thirds of our supply going into the u And in 2024, pre-tariff. 2025, we flipped that.
02:38:20
Speaker
Asia became one-third, LATAM became two-thirds. Hmm. Hmm. Hmm.
02:38:26
Speaker
hey So that's the advantage that we work with. So I don't think this is a problem because fundamentally 100 years later also Akshay.
02:38:38
Speaker
like This is what like Jeff Bezos says. It is not about what changes that entrepreneurs should chase. It's about what doesn't change.
02:38:49
Speaker
I don't think we can argue whether somebody will eat seafood or not eat seafood 100 years later. Yeah, yeah. Somebody can argue whether they are eating shrimps or eating fish or eating tuna.
02:39:05
Speaker
That argument could be there.
02:39:09
Speaker
But it could ah they could argue how they are eating it.
02:39:15
Speaker
Right? But would they eat seafood or not? That argument I don't think is a valid argument. It's almost like would you use a Gemini... ChatGPT, Gemini or ChatGPT or Anthropic or whatever that is, that question mark is there.
02:39:33
Speaker
Now those are already trillion dollar platforms, which have question marks in terms of whether they'll still be a around or not. Whereas us will for sure be around.
02:39:45
Speaker
Hmm. Hmm. Hmm. Yeah, amazing. So what's your
IPO Plans and Strategic Expansion
02:39:50
Speaker
IPO plan now? You you pulled ah the plan previously, right? the Yeah, actually, it was actually a small technical part.
02:39:58
Speaker
we were We had done confidential filing. We were supposed to do public filing. And our public filing was planned around March 31st numbers. ah But we withdrew the IPO.
02:40:12
Speaker
ah process so that we can do all of, we have acquisitions in the pipeline. We can do it flexibly ah from an equity swap standpoint and then we'll refile as per the March 31st numbers.
02:40:25
Speaker
So timeline almost stays intact, just that we've got ourselves a break from the process so that we can do some of the things that we're doing with some more flexibility. Otherwise, ah The process is not as flexible.
02:40:40
Speaker
ah You need to keep, say, be apprised and actually the the the real bottleneck is ah whatever you do post filing, the size of what you do is coming as part of pre-IPO and that pre-IPO is limited at 20% of what issue you are declared.
02:40:59
Speaker
okay And even an equity swap is counted as part of pre-IPO. oh For the deals that I'm doing, i had to rethink. What's the value of these two deals which are currently underway? Both put together is around on a top line basis around $450 million. dollars well ah On an equity value basis, I think both put together around $60-$65 million, think.
02:41:24
Speaker
sixty sixty five million i think Okay. So, ah which meant that we breached the 20% mark. yeah So, and I found, I believe that doing this before IPO is beneficial to us than.
02:41:39
Speaker
And of this 60 million, how much will be the equity swap and how much will be the cash? I think like 20-ish would be cash or 25.
02:41:50
Speaker
yeah Amazing. Amazing. Amazing. Now there is a lot of demand for our story, Akshay. I think people are starting to realize the oh beauty of this whole platform.
02:42:05
Speaker
What do you mean demand for a story? Like you're getting more interest of people who want to be acquired. Yeah, I think we have a pipeline of 2025. when You can like bump up, ah like for the owner of the business, ah he he can be a part of a much bigger story under the Captain Fresh umbrella rather than independent.
02:42:24
Speaker
One is that, but look at it, right? He doesn't have an option otherwise. Hmm. And these are folks who have not built the right ah transition structures.
02:42:36
Speaker
They don't have succession planned. And these are not the sexiest of businesses to attract a lot of blue chip talent. I'm surprised there's no private equity roll-up play happening in this space. There there are a couple of private equity roll-up plays that are there. But private equity roll-ups has very narrow synergy potential compared to Captain Fresh.
02:43:02
Speaker
Their synergy potential is mostly on chopping and slicing the existing stuff that they have. with More financial engineering. or More financial engineering.
02:43:14
Speaker
What I think we really disrupt this model is when we bring in the supply side ah unlock, which is almost 1 to 1.
02:43:25
Speaker
For an EBITDA of $1 that I do, in fact, more than 1 to 1, I can unlock almost $1.5 of EBITDA on the backend. So even if I screw up royally on the deal, I'm still...
02:43:38
Speaker
you know, not losing my shirt as a captain friend. Whereas a private equity doesn't have that luxury. Which is why private equity in this roll-up play in this space hasn't really played out ah in a big way.
02:43:53
Speaker
Would your ah target companies be happy getting equity which is listed in India? Why not? In fact, you look at their Where do they invest?
02:44:07
Speaker
I mean, India doesn't have so much of that ah free capital convertibility, the ability to put money in. out like like I believe that it is not as open as, let's say, like a US market.
02:44:20
Speaker
Of course, it's not as open as US because US deals in dollars, whereas we deal in peace. So there's always conversion. But I think for a 5 trillion market cap, but today India is a very, very safe place to be.
02:44:32
Speaker
um phone Because FIIs take money in and out at their whims and fancies. I don't think ah today you need anybody's permission to take your money out.
02:44:44
Speaker
From that standpoint, the quantum we are talking about is not something that will shake the market. right ah If yeah are if we we are talking about a market cap of 1.5 billion, I think are the guys that have swapped their stake today have around 7% ownership in my company.
02:45:01
Speaker
So that is, say we talk about 100 million dollar ownership, obviously, they won't take out at the same 100 million dollar, let's say they take it out over a four year period, which is 25 million. 25 million taking there you you see in the kind of money that's returned from India, it's in running into 10s of billions of dollars.
02:45:22
Speaker
In fact, this is how I explain Indian market. This is a concern that a lot of them have. Of course, selling Captain Fresh starts with selling India to begin. yeah again right yeah yeah So 25 million today, we we show numbers that why it's not a point of concern.
02:45:40
Speaker
There is so much depth in the market today. no And i also we also come from the other side saying that where would you invest? You would invest in a fund. Where would they invest?
02:45:51
Speaker
Where is the BlackRock going? Where is our fidelity going? What is their emerging market in the exposure? Where is Morgan Stanley going? So why you do want to do that thing of you going there and they coming to us?
02:46:03
Speaker
It's all the same.
02:46:07
Speaker
And you understand this industry. oh Yeah. Amazing. Amazing. Thank you so much for your time, Uttam.