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From Zero to 400 Harbors: Building FreshToHome's $320M Supply Chain
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Building a supply chain across 400 fish harbors before spending a single rupee on marketing sounds like madness, until you realise it is exactly how FreshToHome became India's largest India D2C food startup in the fresh fish and meat category. In this conversation, Shan Kadavil, the ex-Zynga executive who left Silicon Valley to rebuild how India sources, moves, and delivers protein, walks host Akshay Datt through a decade of counterintuitive decisions that no competitor has been able to replicate.
Shan Kadavil's path from helping scale Farmville to 400 million players at Zynga to running India's most complex perishable supply chain is one of the most unusual founder arcs in the Indian startup ecosystem, and the lessons he draws across both worlds are sharper for it. FreshToHome, which he co-founded in 2015 alongside fish exporter Mathew Joseph and six ex-Zynga colleagues, now delivers preservative-free and antibiotic-residue-free fish, seafood, poultry, and mutton to over 2 million customers across 160 cities in India and all seven UAE Emirates, having raised over $320 million from investors including Amazon, Peter Thiel, and the Investment Corporation of Dubai.
In this conversation with Akshay Datt on Founder Thesis, Shan reveals why he deliberately delayed marketing investment for three years, how a real-time e-auction platform built for 3 AM harbor bids became FreshToHome's deepest competitive moat, and why he believes the conventional wisdom that "Indians only buy fish on weekends" is not a demand problem at all, it is a supply chain failure in disguise. With India's fresh meat delivery startup landscape heating up and QCommerce platforms reshaping every D2C category, Shan's framework for deciding what belongs on Blinkit versus your own app, backed by actual unit economics, could not be more timely.
👉How FreshToHome built a real-time e-auction platform that processes 1,000 bids at 3 AM across 400 harbors, giving fishermen consistently higher prices than local auction floors while securing FreshToHome the freshest and most competitively priced catch across India.
👉Why Shan waited until 2018-19 to spend seriously on marketing, and how FreshToHome cut marketing spend from 25-30% of revenue down to 2-3% while continuing to grow, by solving LTV-to-CAC ratios at the city level first.
👉What the actual unit economics of selling fish through a QCommerce dark store look like, why a typical dark store can only absorb around 70 fish orders per day versus FreshToHome's own dark stores doing 250-400, and why Shan treats QCommerce as a complement rather than a threat to the own-app channel.
👉How FreshToHome reduced perishable wastage from over 20% at launch to 2% today, and why that number is the single most important operational metric in any fresh food supply chain business.
👉Why Shan co-founded FreshToHome with eight co-founders, how he structures each city as an independently run internal company with its own CEO and P&L, and why he believes founders building operationally brutal businesses should always err toward more co-founders, not fewer.
👉Why Shan predicts India will become a net importer of fish within this decade, pointing to over 550 containers of Vietnamese Basa already being imported annually as early evidence of a structural protein demand gap that no single category player has yet moved fast enough to fill.
#FreshToHome #ShanKadavil #FounderThesis #AkshayDatt #IndiaDTCFoodStartup #OnlineFishDeliveryIndia #FreshMeatDeliveryIndia #IndiaFoodSupplyChain #DTCBrandBuildingIndia #IndiaStartups #D2CIndia #FoodTechIndia #IndiaEcommerce #StartupIndia #SupplyChainIndia #IndiaFoodtech #MeatDeliveryIndia #IndiaFounderStory #ProteinEconomyIndia #ZyngaIndia
Disclaimer: The views expressed are those of the speaker, not necessarily the channel
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Transcript
Intro: Shan's Journey from Silicon Valley to Fresh to Home
00:00:00
Speaker
Fish thing is about 1% of India's GDP and it's a lifeline for almost 14 million Indians, the fishermen community. India is a weekend non-wedge market. This makes it very hard to build a business. Shan walked away from Silicon Valley to sell fish in India. A decade later, fresh to home moves 20,000 of fish a year across harbors and cities. He took a commodity nobody trusted online and turned it
Challenges in Building a Reliable Supply Chain
00:00:25
Speaker
into a brand. How to build a moat out of fishing harbors and why his prediction for India might surprise you. We were quite romantic about it in the beginning, beginning but some of that romance vanished when we saw how difficult the supply chain was. Building that supply chain is the moat. It's been painfully built hand by hand. We have about 200 dash doors and, you know, 15 large factories built from scratch. Why not piggyback on the dark store infrastructure of the quick commerce players? This is a business which has got incredibly thin margins and also very high waisted bills.
00:00:54
Speaker
Every single rupee would matter. India will become a net importer of
00:01:04
Speaker
Shan, welcome to the Founder Thesis podcast. um You are a serial entrepreneur, founder
Shan's Early Tech Career and Entrepreneurial Ventures
00:01:10
Speaker
of Fresh to Home. ah Give me ah like an understanding of your journey to the Fresh to Home idea, ah like what happened before that.
00:01:19
Speaker
Thanks, Akshay, for having me. ah I started my career as an engineer in the Valley in 1999. I fresh off the board. I was in New York earlier and then I had been in San Francisco.
00:01:30
Speaker
Started as a programmer in a company called Support Shop. i But what you you studied in India then you went... I studied in India. I did my engineering in a government college in Modell & Staining College in Cochin. And then after that, I was in US from 1999 onwards.
00:01:46
Speaker
I was fortunate to see sort of the you know the ups and downs in the valley. ah And I ah you know did quite well in my first company, which is SupportSoft. I was their enterprise CEO when I was quite young, even even before I knew you know how to handle public markets and so on. And SupportSoft was publicly listed at the time. and then How old were you when you became the CEO of?
00:02:09
Speaker
I was not the CEO.
Success and Challenges at Zynga
00:02:10
Speaker
I was the CEO for the enterprise division. And I also had an operations I was based in San Francisco at the time. And that was, ah I guess I was 26, 27 at that time.
00:02:21
Speaker
ah And then ah I then ah did a gig of my own along with, you know, some of my other core friends and family from SupportShaw, including a couple of my classmates, you know, Jayesh and others who've been with me for that journey.
00:02:38
Speaker
And we started on a company called Debox, which was a cybersecurity. So we used to run, you know ah network appliances, cybersecurity, and so on. ah The guys were, and you know ah we were quite reputed a from our tech jobs perspective. We were one of the largest ah sort of architects, CTOs in the Valley at the time.
00:03:00
Speaker
ah And then Debox did quite well. We sold that in 2008-2009 timeframe.
00:03:07
Speaker
And then I was back to the corporate gig, ah but this time in the gaming world. ah Mark Pincus and Kadir were the founders of my first company, Supportsoft.
00:03:19
Speaker
And they then started another company called Zynga, which is probably almost everybody who knows Zynga for games like Farmville, Mafia Wars and so on. So I was among the 80th employees at
Founding Fresh to Home: Meeting Demand for Fresh Fish in India
00:03:30
Speaker
Zynga in San Francisco.
00:03:33
Speaker
And i was a CXO in the company and used to run the India business. And also I set up, I was a founder for the India office of Zynga. And, you know, we hired and grew a fair amount of the games that were operated out of India and also many of the X-TAC behind Zika, which was missing one of the world's largest consumer ecosystems then.
00:03:54
Speaker
Just to give you a scale, we were the fourth largest consumer property after Google and Facebook and a bunch of others in early two thousand and nine ten Farmville was a game that was played by almost 400 million people at the time.
00:04:10
Speaker
So it was one of the biggest things. And it was the second largest IPO after Google in 2011. So it was a significantly large initiative. ah And I was with Zynga till 2015.
00:04:24
Speaker
Now, in between, in obviously, I'm a foodie and I'm going from Fresh2Home. So, and I come back. I want to just ask a few questions about Zynga before you tell me there the origin of Fresh2Home.
00:04:38
Speaker
um Did Zynga miss the mobile wave? I mean, you're saying it was the fourth most trafficked ah company in the world ah at one point of time. ah What went wrong? like Or was it too dependent on the Facebook platform?
00:04:53
Speaker
Zynga was an amazing learning of certain things that went extremely well and then certain things that didn't go as well. And then how things went back to being well altogether. Zynga is now part of Take-Two and it was a significantly large IPO, then significantly large sale after that.
00:05:11
Speaker
ah But Zynga was all all web ah way back in the time when we were the largest. And then mobile took over and it was not a a technology change that you could predict in a short period of time.
00:05:25
Speaker
And although we were all you know saying it will come, it will come in 2011, 9, 10 timeframes and we had a huge first mover advantage. ah You know, there were other games that then suddenly the ecosystem became quite large. Way back in 2009, 10 Zynga perhaps would be making more money than Facebook itself.
00:05:43
Speaker
And ah and you know at some point, ah the mobile games then took over. But then Zynga got back into its strides, launched back on mobile, and then eventually you it did quite well for itself. But and these are some trends that you find it really hard, regardless of how much ever you plan. and These are some of the most brightest and best minds in the world.
00:06:04
Speaker
ah and But it ended up doing quite well in the end. But there were a period of about two, three years of IITIS where you know we may have missed perhaps one of the largest trends in the world. But then we got back and it took some three years to do that.
00:06:19
Speaker
I was also wondering, why did you sell your cybersecurity firm? So, Dibox was not a very large venture. It was a smaller venture and it was largely B2B.
00:06:30
Speaker
And I am a consumer guy at heart. That's really what I enjoy doing. I i love launching consumer properties, B2C plays. That's really what excites me. And the scope, and interestingly enough, I didn't really actually want to do ah too much into Zynga because at the time, because I was from, i didn't realize what gaming potential was. I'm a gamer, but at the same time, I didn't realize what social gaming was.
00:06:55
Speaker
It was a really different kind of team than that I would do ah and based on what I would do earlier. and But when I got hooked in ah by the previous founders of Zynga, they gave us a project through the box saying that, hey, why did you guys start out? Because we were all resisting. and We didn't realize what potential of a gaming world would be way back in 2008-2007 of frames.
00:07:19
Speaker
And then it started out as a small project at DeBoutts. It then ah picked up a significant amount of scale. And then we realized that we were literally sitting on a rocket ship and building it while it got launched. And that learning and that sort of scale, imagine going from about a hundred billion dollars to a couple of billion dollars of revenue in a literally a span of, ah I don't know, two years or 18 to 24 months.
00:07:43
Speaker
It's quite accelerating at that time. And you couldn't miss it. ah How are these games monetized? Because they're mostly free to play, right? So how do how how do they get a billion dollars of revenue? ah So, ah you know, the the scale and scope is so large that, ah you know, virtual currency, which is if you in Farmville, you would buy ah you know a wedding ring or a Valentine's ring for your a significant other.
00:08:08
Speaker
ah to avoid your plants from withering, ah it would be so large that you are probably going to be making you know the e equivalent of the GDP of her you know some of the developing nations at the time.
00:08:22
Speaker
So it adds up across a huge number of users. You're talking about 400, 500, 600 million people playing the game. In those days, it would be equivalent of the population of perhaps a significant portion of the world.
00:08:38
Speaker
And hence, every ah penny would add up. And that's really how the monetization would kick in. And Zynga would monetize quite well. ah Because the games ah were ah quite engaging and then as over a period of time, it adds up.
00:08:53
Speaker
Okay, got it. Okay, so now tell me about the Fresh Home idea. So I was ah back in India ah way back in 2009-10 time frame and ah then I was getting Zynga up and running in India. That was a amazing journey.
00:09:09
Speaker
I had no clue I would ever get into fish or meat or the others. i had no idea about the domain except eating them. And I'm a foodie at heart. And the kind of fish that you would get in my hometown ah in Kerala was very hard to get when I was there in the US. So when I came back, I would go on some really good fish.
00:09:29
Speaker
Recently, they got married. And my wife and I would really enjoy sort of the kind of fish. And it was very hard to get that ah in Bangalore. Because Bangalore is ah you know though the supply chain to a fresh fish. It comes from either Kerala or Tamil Nadu or others.
00:09:46
Speaker
And it takes about three days in the whole supply chain and across multiple middlemen. So we would go to Shivaji Nagar or we would go to one of those wet markets to try and buy it out. And it would be a gamble, right? One day you might get really good fish. Another day, it's just incredibly hard to predict what you'll get.
00:10:01
Speaker
So to some extent, we would then start bringing fish from my hometown in Kerala. I live from a coastal area near Kaledapal in Kerala. From there, whenever we go home, mom would pack it and then we would bring that back up. And that became a routine habit.
00:10:15
Speaker
At some point, ah my wife noticed that there is a website called seedtohome.com. And when we looked at it, it was ah somebody from Cochin who was shipping fresh fish by train ah every day. And it would land up the next day morning in Bangalore. And we realized, okay, this is equivalent to what my mom would pack for me.
00:10:37
Speaker
The taste was superb. It was Matthew, my current co-founder. He had started a company that did this. And at some point, we realized that this is amazing. So we all switched back. And I'm sure that many folks in Bangalore would have done that.
00:10:50
Speaker
And we got really hooked to it. ah In 2012 or 11, I think this was. And then at 2013 or so, Matthew started his business. And I mean, I could no longer get it. I didn't realize as a consumer, I didn't know what the reason was at the time.
00:11:05
Speaker
I went back and tried to search for Matthew and he was not on social. that He's a fish exporter. He's not like on Facebook or LinkedIn or the others. yeah And then I hunted down and tried to find the guy who did the website for And eventually we met up and then finally, ah you know, I looked at Matthew and asked him what went wrong. He said that, you know, it's a really different brick and mortar business and now I'm trying to go online.
00:11:29
Speaker
And he was visionary, right? if He looked at domestic demand and B2C and then he was able to get the the idea off the ground. But scaling it is a completely different ballgame. It's an e-commerce play and so on.
00:11:41
Speaker
So I said, okay, why don't i angel invest in you? I gave him some seed capital and then to try and get the business back up again. And then over a period of time, we realized, and we as in the rest of my Zynga co-founders and ah Matthew, we realized that tech is the primary way of figuring out this supply chain, because this is a hugely supply chain oriented game.
00:12:06
Speaker
And ah eventually, one thing led to the other. And then post-Arsinger tenure in 2006-15 end, we started Fresh2Home, a completely new company ah with all of us together. That was how, ah ah you know, as Matthew, my co-founder, would put it, ah the market met the corporate guys, like the fish market, effectively, because he refers to himself as coming from the fish market, ah met the corporate style dudes.
00:12:31
Speaker
And then we started Fresh2Home. uh so you said there were other co-founders also with you and what was the trigger for moving out was it the acquisition no it's an acquisition happened actually in uh 2021 or two or three or something else so we've uh we had done uh you know zinger grew so fast so quickly right and uh we had spent a significant amount of time building it and uh know, at some point you got burned out because it was so fast of a ride. And we had done enough. We were there from 2009 to 2015.
00:13:05
Speaker
Company was stable. All the, you know, things went up and down, and but it came down to ah ah quite a stable state and and it was doing quite well. In fact, the first angel check for Fresh2Home was written by the founder of Zynga, Mark Pincus. And we probably have, and, you know, along with him, I think it was Peter Thiel as well.
00:13:24
Speaker
And then we had many of the Exinger guys were angels in Fresh Tour. It was quite an appreciative journey. I had left at least the India operations in the studio and the other games that I used to run in decently good hands, found out a successor.
00:13:41
Speaker
And then we moved out and it was a bunch of us, about you know six of us who had worked with each other across multiple different companies ah and including ah you know two of my ah ah in a school friends.
00:13:57
Speaker
So effectively, we've been working with each other for almost 30 years. right So it's ah it's a group that... Knows each other quite well. I was you know the first among the equals, but it was essentially a pool of equals.
00:14:08
Speaker
And then we joined hands with Matthew and then another co-founder of Firoz to start Preshjo. And had Licious also started at this time? I think Licious and we started roughly around the same time. ah I don't recall exactly when Licious started, but this is 2015 and that's really when we started.
00:14:26
Speaker
Okay. But we we had actually started out not really fully into B2C. B2C is, we've done a go-hold ride and we've done a fair amount of B2B in the beginning. ah We went then all in to B2C, and that's really how we started out.
00:14:41
Speaker
when When we started out, the idea was really around supply chain. ah So we knew Matthew ah you know had his business. So when I analyzed the business, I realized that it's an incredibly hard business. right I mean, we were quite romantic about it in the beginning, but some of that romance vanished when we actually went in and saw how difficult the supply chain was. And because Indians don't eat...
00:15:04
Speaker
ah ah frozen fish or in general, the consumption is almost always fresh fish. Fresh is a very, very hard commodity ah to bring through the supply chain. So the the natural question to me is that, you know, one, what is the unmet need? And then what's the unfair advantage we can bring in, right?
00:15:22
Speaker
The unmet need is ah you know was quite clear. One, you know my own personal experience. And obviously, an an entrepreneur is always colored by you know a personal bias on solving his own problems.
00:15:33
Speaker
So that gave me ah an idea of the of the issue. and But I was focused primarily on fish as a category because that's the only category that where I had experienced the issue way back in time.
00:15:43
Speaker
And then ah I realized that I was not alone, right? Because when we started out, literally within like a year, ah we got to, ah I guess, about 15, 16 or 10, 8 to 10 crore rupees of revenue per year. So it was like a ah huge amount of euphoria.
00:16:00
Speaker
And so we realized that the product market fit is not not um not an issue. the This 10 crore revenue was B2B revenue? Because you said you started with B2B. No, actually, ah we started out about 2-3 crores was B2B.
00:16:13
Speaker
ah Then we were supplying to some of the largest hotels in Bagelow. ah But then we soon realized within a year's time that i'm getting payments from the hotels is quite hard.
00:16:24
Speaker
So we were not able to get payments from the hotels. And as a result, ah it was a really hard to, it was a great business. I mean, things were moving really fast, but we were not actually getting money back.
00:16:35
Speaker
And then we soon realized that that will, you know, bankrupt us. You know, I had not raised capital until 2016. I bootstrapped the company all the way up to 2016, 17, 2016 end.
00:16:46
Speaker
ah So a fair amount of this was from our own Zinger savings and so on. And at some point, we realized that that's not going to be tenable. So we then switched gears immediately. And obviously, we had a small sliver of the original C2 Home business.
00:17:02
Speaker
And then we focused all in on B2C. So we know the learnings. The reason why B2B was critical, at least in the beginning, was that we needed scale ah to be able to bring in or saturate at least four or five harbors.
00:17:17
Speaker
ah And that gave us a scale. Then over a period of time, we then switched all in onto B2C. So coming back to you know where I saw the business, a huge portion of this was around ah not being able to get a product that you wanted are the quality that you wanted it.
00:17:32
Speaker
So that's the unmet need. And you know I often debate, and the debate still goes on, is this a commodity or is this it a ah not a commodity? And it's nowhere in between. but ah When I think through this or when my team thinks through this, it's not a commodity to us. Because a commodity would be what you would get in market.
00:17:51
Speaker
It would be you know a product that has gone through a three days of transport to the wet market. ah But a consumer is expecting something that's incredibly fresh.
00:18:02
Speaker
So there is a big a dichotomy between sort of what a consumer expects and what a wet market can offer. And that's where we felt that a branded product that satisfies what a a consumer can wants is really what we need to offer.
00:18:17
Speaker
Now, then the next question was, is that consumer large enough? Because the people who can afford that or people who can afford the cost of that convenience, cost of that quality, is that a large enough category? ah we were incredibly positively surprised that ah you know it's not as big as what know you would have other people tell you, but it's still quite big. We're now talking that about roughly the size of maybe 60 million people. and Maybe the monthly transacting users in a Blinkit or a Spiggy would be a good proxy today.
00:18:46
Speaker
The wet markets are incredibly large. It would be a 600 million large TAM, but that's not really the time that we can target with this kind of a product problem. At least now, we have to graduate over a period of time. and ah But the current TAM itself is incredibly large.
00:19:00
Speaker
Now, on that, there is an unmet need. The unmet need is ah the supply chain is so broken that the products that you get are often quality-wise quite high in terms of issues. You also have a significant amount of preservatives used to cut short the life or increase the life because of the transport and the supply chain. So you have to go from an harbour like Kuchin or the others back to a middleman in the city. Then from there, it has to come to yeah shiwa another middleman and from there it has to come to your neighborhood wet market before it comes to you. This used to be the supply chain.
00:19:35
Speaker
So in inwin inevitably you will have to keep ah ice and open trucks and that's the mod in which India does that. So you have to add some amount of ammonia or some way to enhance that shelf life. Now we take great pride that we don't add any preservatives or any chemicals to run that entire supply chain because our supply chain is 24 hours, you know, in the best case or in the easiest case and 36 hours in the max.
00:20:02
Speaker
And it's all chilled reefer trucks and so on. So that whole realization that if you give that kind of a product, you can convert a commodity into a branded product is really what gave birth to Freshdoor.
00:20:14
Speaker
So we started seeing adoption. 2016, it grew up quite rapidly. We were really, really fast-flowed. ah But then that led to the question and and at that point of time it was still manual. like We would call up Matthew. Matthew would have five or six people in the various different harbors and then he would call them up at 3am in the morning and he would ask you know what's the price of what's the price of spearfish and so on.
00:20:37
Speaker
And then we were only in Bangalore and Delhi at that time. And Delhi would be air shift from Cochin. So it's a really different product proposition than the product that you would get in Delhi. Because as you would know, Delhi does not have access to a coastal region. So it has to come from Gujarat or a Calcutta, which is an eight-day transport by truck.
00:20:59
Speaker
So given that nuances, we became incredibly popular with the early cohort of users that we got attracted with fish as the only proposition. We had no other routines beyond fish.
00:21:10
Speaker
but but But we want to ask a few clarifying questions. ah Sure. So what what what does a harbor look like? what is Is that basically a place where a lot of boats are there and the fishermen go out, cats see, come back there? what what is let Let me try to visualize a harbor for you. So a harbor would ah probably be the most high unhygienic place that you would have seen. It would not look like a Tokyo fish market or waterfront market in the buyi ah But at the same time, it's a lifeline for ah almost 14 million Indians, the fishermen community.
00:21:46
Speaker
ah The fishing is about 1% of India's GDP. So it's a hugely large business ah for across India. And a harbour is where the boats would come in. These boats would come in with pristine fish, right? These are fish that are incredibly fresh.
00:22:01
Speaker
India relies largely on artisanal fishermen and these fishermen are some of the most exploited fishermen. So the sale is always almost done by the middleman. ah And the fish would come in to the harbour. There would be an auction on the harbour floor. Now there are big harbours and small harbours. Small harbours would be a sandy beach.
00:22:19
Speaker
And you would come in, the fish would come in with, you know, a bucket of fish at a time. The middleman would come in and say it's thousand rupees for this bucket. So they will be able to gauge the weight roughly of the product and they will put a ah weight on it.
00:22:31
Speaker
And that's how the exchange of goods happen. Now, of fishermen are ah very, very difficult ah you know for themselves and you know for the whole process because quite often what happens is if they catch a huge amount of fish, suddenly the price will crash in that harbour. The middlemen will ah always have a constant demand.
00:22:50
Speaker
And hence, if you catch a lot of fish, which you can't predict the this seasonality of the product, what fish you will catch and so on. And then the price will crash. And effectively, if you catch less fish for a particular species, then the price will shoot up. This is essentially the demand and supply economics at the harbour.
00:23:06
Speaker
The people who fund these processes are the middlemen because they will be glorified loan staff and they will fund. And you know, you will also have other people in the ecosystem who will give you, you know, 90 rupees in the morning and you have to give them back 100 rupees leaving. That's essentially how this whole ecosystem may get funded.
00:23:22
Speaker
And these middlemen who are agents then for larger players would then bring that for another auction into the Kivaji Nagar or, you know, a bunch of other larger markets across India, the INA market in, you know, in Grasipul, for example, in Delhi.
00:23:40
Speaker
and it's that's the supply chain. Now, these are... ah this is how they the Who are the bigger players? You said these ah people in the harbor are agents for bigger players. There are no ah people that you would realize. There are no organized players in the supply chain. The organized players only come in in the city. right Because it's just...
00:23:59
Speaker
incredibly hard to navigate this supply chain. This supply chain is almost 100% people you would have never heard of and mostly individuals. And that's typically how this whole supply chain ah you know would be managed.
00:24:12
Speaker
And as a result, managing the supply chain and creating a moat ah is incredibly hard. And that's really the realization that drawn to us. like We have to create a moat in this harbor.
00:24:23
Speaker
and We have to be present in this harbor. We have be part of this whole auction process. And it's not as easy as you think because you're talking about a large harbor, which is about maybe 6,000 people and of which maybe 4,500 or would be fishermen.
00:24:40
Speaker
And then the rest would be middlemen, helpers and all that and our ecosystem. and it's it's And in in many harbours, these middlemen are actually a good thing right because they help being able to sell the produce back to the you know cities and so on.
00:24:55
Speaker
In many places, depending on you know the economic situation, it could be exploited the fishermen as well. both Both tend to happen in these harbours. So, and now I'm a tech guy coming in and watching, you know, the whole thing with Jayesh and Neil and Jaleel and Tabakar and Suresh and others who are my other co-founders and Matthew.
00:25:13
Speaker
And what we are seeing is that this is a huge opportunity because we are seeing mounds of fish. We seeing transactions left, right and center. But it's not something we can understand. It's completely alien language though.
00:25:26
Speaker
So we had these hugely romantic ideas of creating an ERP that would, you know, completely do the full software and so on. And then manage the entire harbors, volumes and so on. But it didn't happen because it's just hard to communicate these ideas.
00:25:42
Speaker
So then we thought through in a much more simpler manner, working together with Matthew, and we said, hey, why don't we just automate the whole process of auction just for us? Let's not worry about, you know, being sort of the big daddy in the harbor, taking care of this whole coma, which you obviously was the first thought process.
00:25:57
Speaker
And just think through what does special homes need? And, you know, what do we need? So what do we need? What we need is we need about 100 150 varieties of day. which essentially means you have to navigate ah from the six or seven harbors that Matthews was then working on to about, you know, 150 to 200 harbors.
00:26:14
Speaker
ah And then ah be able to source to what we wanted. So we then thought through that. India is about, I don't know, 1,000 to 2,000 to 3,000 harbors. And if you come to small harbors, maybe up to 5,000 harbors.
00:26:29
Speaker
And it ranges all the way from, you know, Oka to Araval to down to Ratnagiri to W. Kuchin. then going all the way up to Kakinada and then Chilka Lake and so on. So it's a huge, large ge geographical divide. right So we said, then let's start out by putting two collection centers.
00:26:48
Speaker
So we then started putting collection centers every 100 or 200 kilometers. We would have a 400 to 500 square feet or a thousand square feet collection centers, which can manage chill supplies and from there. And then we started putting through trucks and reefers from these places back to the nearest city.
00:27:04
Speaker
ah And then we realized that we had to go then pick up small volumes of fish from these different harbors back to the collection center. Initially, everything was manual and then we would have a contact of Matthew who would then give us the fish and the supplies.
00:27:18
Speaker
Eventually, we realized that this process is not scalable, right? And to be fair, Matthew is also not getting any sleep. But it's 3 a.m. in the morning when all the auctions would happen. the The fishermen go out at night for fishing. fishermen would go out at night, morning, all through ah all through the day. But since the you know the wheels of the economy usually turns around before sunrise, that's when the most amount of the options will happen. like Because they'll try and sell to the nearest city first and so on.
00:27:44
Speaker
And ah so 4 a.m. or 3 a.m. is an amazing sight. If you have not now been to a harbour, I would strongly urge you to go there and check check it out. So we then soon realized that we have to be present there.
00:27:56
Speaker
and obviously, we can't be with the size of a small startup at the time. We couldn't be present in all those harbors. And so we realized that then we have to do the next best thing, which is to clone Matthew and look at the way that he's actually doing these auctions. So we then eventually came up with an e-auctions platform where ah the fishermen would then, ah you know, start auctioning that produce with us. It grew over a period of time.
00:28:21
Speaker
And then that became the primary sort of way in which we started sourcing. Because finally, if you look at the economics of it, ah the fishermen ah will always get a higher price from us. Because if a harbour is having, let's say, 100 rupees or 200 rupees is the auction price, the next harbour, because the demand and supply mismatch, could be at 300 or 400 rupees.
00:28:44
Speaker
So we can always pay, if it's 200 rupees in one harbour, we can always afford to pay 250 rupees or 240 rupees because that's what the fishermen would auction with us. versus an harbour where it is 400, they would option with us at 440. Geographically, will always get the best price across these harbours because of pure price asymmetry across these harbours. But in that particular harbour, the fishermen will always get a higher price. That was the crux of how we built the system.
00:29:09
Speaker
ah It's not complicated. While there was it was know we used a fair amount of machine learning because initially you had to give these responses at 4am in the morning. When you're listening to all of these different you know price but ah information across the harbor, we listen to, let's say, 1,000 to 1,500 bits coming in at that time. You to give an immediate red or a green on their phone.
00:29:31
Speaker
The harder thing was actually explaining this to the fishermen. Because fishermen, you're trying to teach fishermen technology is an incredibly hard problem. But Matthew was one of the key people that they knew. They knew they had existing relationships.
00:29:45
Speaker
Using that, we would start with that. And then eventually, over a popular period of time, we were now in most of the harbors across. And then from there, we built that entire back-end supply chain. This is a business which has got incredibly thin margins and also a very high waisted is.
00:29:59
Speaker
So building that kind of a supply chain is very, very, very hard. Every single rupee would matter. So that's essentially the the whole journey into building that. And freshness is also a direct function of how many arbors that you are.
00:30:11
Speaker
We are talking only about marine fish at this point. And there's a different category of product, which are farm products, where this price arbistar doesn't exist. but That's the based on the farmers, farmer inputs and so on. That's the next category that we got into.
00:30:23
Speaker
So over a period of time, um using a technology-enabled edge, ah we had figured out the unfair advantage, which is really the supply chain. And we then got that going. Today, we are in 140 City.
00:30:34
Speaker
And that's essentially the backbone of what we do. We are probably the largest fish player, domestic player in India today, organized. And ah that's the whole volumes and the whole way that we did that was built on this whole supply chain. And then in 2000... How many collection centers do you have today?
00:30:53
Speaker
We have about 40 collection centers. Okay. And ah how many, you said about 250 harbors you're present in. We are today in about 400 harbors. um and and then we are probably doing about 20,000 tons of fish ah in a year.
00:31:12
Speaker
And then, you know, together with other stuff, we might be doing about 40,000 tons as well. So it's a significantly large volume and and it's an incredibly hard operation. but It's not an easy operation.
00:31:24
Speaker
ah And, you know, but obviously with eight co-founders, we are able to scale that operation quite well. If I had ah tried to do this on my own, I would probably have gone in insane or had an early heart attack or or the other. it's It's such a difficult business for that.
00:31:40
Speaker
And that is the moat. That's effectively the moat. Right. um So we were just chatting before we started recording. I had interviewed the the Captain Fresh co-founder. One of the things he told me was that India is a weekend non-wage market.
00:31:57
Speaker
And ah This makes it very hard to build a business because your demand is lumpy and ah weekends will always have more demand than weekdays and you want to provide fresh produce. ah How do you handle things like that?
00:32:13
Speaker
um It's a hard business and it is quite seasonal and it's also quite weekend heavy. right Thursdays to Sundays are typically our largest volumes. ah But at the same time, ah chicken may not follow the exact pattern. like Chicken obviously is also skewed towards weekend, but you will have chicken and red meat and others.
00:32:31
Speaker
ah And what I've realized, and this is a huge learning, the skew and pattern of the buying is not really a demand issue. It's more of a supply issue.
00:32:45
Speaker
So if you look at sort of ah even like the wet markets, the availability of the variety that you need, if you walk up to Ghazipur mandi or if you go to like a Tassoon Dock in Mumbai or if you are in Shivaji Nagar or the others, will be hugely skewed towards the weekend because that's essentially how the ah traditional supply chains work.
00:33:04
Speaker
But it's not really that a human being does not want to eat this you know during the weekdays. There is obviously a religious holidays and others where certain Tuesdays, and Mondays and so on, people will not eat it.
00:33:15
Speaker
During shravan season, there significant dip and so on. But on a sort of a ah yearly ah perspective, it's really about your availabilities. And availability is a pure function of economics, right?
00:33:28
Speaker
Because and it's not that the vendors don't want to do it. It's just that the economics don't work out unless you have that kind of volumes. Because this is also a hugely perishable product, which essentially means that the wastages, and especially for folks who are starting that out, is a function of demand as well.
00:33:45
Speaker
And if you don't have that demand and volumes, your perishable volume can be like 20% or higher. It can go up to that. When we started out, in fact, it was 20% and a higher. And then over a period of time, we have brought that down to 2%. So which means that the moat is also the volumes and to be able to supply that during the weekdays. So over a period of time, we have figured this out and we have skewed that in such a way that we are able to ah provide enough volumes. And then we have educated our consumers also on those, right? Because we can give better offers. We can give other ways around to spread that demand across a period of time.
00:34:21
Speaker
So, okay ah to to summarize, basically, it's still a pertinent issue in how the supply chain is managed, but over a period of time, we have managed that. And some some of these common issues are the moat in running a B2B business in India in this particular category.
00:34:40
Speaker
How did you build demand? Because, so, you know, it what you're saying is that ah if you have built up your proprietary demand in a way, ah then the weekend issue is not really there. ah How did you build that demand up?
00:34:55
Speaker
So, let's talk about building the brand, right? So, ah you know the way that I talked through this was, in the initial days, for me, it was all about supply chain. It was really about building and figuring that supply chain out. And we were largely focused on Bangalore and Delhi. That's only two markets that we really focused on.
00:35:10
Speaker
ah And since most of the supplies came from Kerala, obviously we were present and which in Kuchin and other towns and so on. ah With that, ah we soon realized that consumers tend to look at this as a single window shopping experience for all proteins together. That's really how they think through this.
00:35:27
Speaker
And ah we then realized that ah effectively you need to be able to justify the cost of the CAC because you know like all D2C brands, it's expensive ah to build in organic demand.
00:35:40
Speaker
And the organics will max out after some point of time, right? And organics max out for us perhaps, I mean, then there was a resurgence in organics during COVID, but organics pretty much at sort of the scale started maxing out after the first two or three years of operation.
00:35:55
Speaker
Then it all came down to CAC versus LTV, right? And CAC, the cost of acquisition would probably be, today it's in the range of about 300 rupees. Those days were about 250 to 300, I would say. And then in those days, were about 100 rupees or 80 to 100 rupees.
00:36:11
Speaker
And then... ah Like all other seafood or others, the consumption of seafood alone as a category, ah the frequency of purchase will not be that high because consumers tend to think of this as ah as a fixed purchase. So roughly about 3000 rupees would be the valid share of an average and consumer of fresh to home in a month.
00:36:31
Speaker
with about 2.6 purchases per month, with all kinds of stuff put together. But now if you're putting only seafood, that draws from 2.6 to about 1.4, 1.5 kind of stuff. So effectively, you needed to have a basket of proteins, right? And this is not rocket science, but this is what it is.
00:36:48
Speaker
And then, ah two and the first thought process was then, and this is something that we realized early in 2016, so I scribbled in a piece of paper where you know we knew where we were going.
00:37:00
Speaker
The idea was then to become quite large in chicken and mutton and freshwater fish as the next big two categories. Freshwater, we did much earlier. We started getting into contract farming. We started also buying from you know the farmers across the various different harbors and so on.
00:37:18
Speaker
And we built those moats as well. So we became a full protein shop. We only started marketing ah maybe timeframes because once we knew that LTV to CAC equation actually works out.
00:37:32
Speaker
And then once we figured that out, then we went in all in and then we started building a brand. And then we started building and because we now had enough ah ROI for the money that we were spending. And then we were able to build that across all of the cities that we were present.
00:37:47
Speaker
So I caught snatches of what you were talking in terms of spending on brand. ah Can you just give me like a short summary? in the We did not solve the demand problem in the beginning.
00:37:58
Speaker
Our idea, and this is really when I think about building any company and from first from first principles, we started with figuring out if there is an unmet need in the market and is there an unfair advantage that we can bring in.
00:38:11
Speaker
So once we figured that out and we figured out the unfair advantage, it farm-to-fork supply chain. And ah with that kind of a quality that we can deliver with you know no antibiotics or no preservatives as our key brand guideline. That's really the unfair advantage we built. And supply chain is really what we built first.
00:38:28
Speaker
And that's also what helped us distinguish the commodity to a branded plate. Once we've got these ingredients at least in one city, which is Bangalore, ah And, you know, we got that more or less in place.
00:38:41
Speaker
Then we figured that it was now time to figure out how to bring in demand. Now, when we started bringing in demand, ah we soon realized that fish as a single play category would be hard to do that because consumers tend to think about this as a wallet of ah across multiple different proteins.
00:38:59
Speaker
And I was just giving some numbers earlier, which was essentially a consumer today thinks about this as a 3000 rupees in average monthly purchase wallet. ah And ah of which, you know, the online players, at least we what we are seeing is that we get maybe half of that.
00:39:15
Speaker
ah We get about four times of purchase in ah in a month, of which we get about 2.6 times. Now, if you're restricting yourself purely to seafood, then you're talking about a 1.3, 1.4-ish, given that we're leader in seafood.
00:39:29
Speaker
ah So we then figured, how do we get the best of breed poultry as well as mutton in this whole mix? So then that was the next endeavor. ah We then started doing large-scale contract farming. ah And you know similar to what you would see today with some the other players, we went into the chicken can supply chain.
00:39:47
Speaker
Realized that there is a significant amount of issues around antibiotic residue in chicken. And we then figured, you know, how to mitigate that. There are obviously a fair amount of players who do it the right way as well.
00:39:59
Speaker
And ah we either partnered with some of those institutions in cities where we don't have the presence or in particularly in Bangalore and South India, we went all in and started doing the contract farming ourselves. ah We also did the same for freshwater produce. So we had a really good idea, at least in Bangalore, of how this entire supply chain got organized.
00:40:22
Speaker
We then started spending on brand and building the brand. Now, ah all of us come from a brand ah world, having spent significant amount of time in ah the gaming world. But it was mostly from a consumer understanding perspective.
00:40:36
Speaker
ah We then you know ah hired folks who had much better knowledge of reaching out to consumers than us. And then we started doing significant amount of brand support.
00:40:47
Speaker
ah We built the brand, Ranveer Singh was a brand ambassador. And he had a huge, because we started out as a South Indian brand. And then with Ranveer Singh, it helped us bridge the gap. And then we became a pan-India brand.
00:41:00
Speaker
So today we are ah in 140 cities. ah We do about 2 million sort of customers. And we are present, we're doing almost an order a second. So almost 20 million orders in a year. And that's really how we scale that brand.
00:41:15
Speaker
What is the core product from a consumer perspective? You get whatever you want, like say a fish or whatever, in a fresh-to-home kind of a packaging delivered at your doorstep.
00:41:27
Speaker
The core product is joy. Joy in giving you that kind of ah ah a meat or a fish. ah Fish is the key category. About 40% of what we sell ah is fish. Another 40% would be poultry.
00:41:42
Speaker
And then everything else, including the ready-to-eat and ready-to-cook, would be the remainder. That's really what we've what we specialize in. And we are ah ah the the key USP would be variety. right We are probably the only ah you know fish portal across the world where or a local fish market where you will see on any given day of over 100 That's incredibly hard to do. And India is so large, micro-costumes of different tastes than others, like the what the mallus eat, the chameleons may not, be the bongs may be different, and so on.
00:42:18
Speaker
So we have that kind of a variety that ah caters to every palate. And that's a hugely disruptive way of thinking about this category. and ah And the channel is online order delivered to home.
00:42:33
Speaker
Yeah, almost 80 to 85% of our volume and almost 100% until ah you know one and half years back. was all Fresh Tom's own app.
00:42:43
Speaker
And that's obviously the largest channel. We get significant amount of density in most cities. ah But in the last one and a half years back, we have partnered with the QCommerce place. Amazon invested in us ah in, I guess, 20, about two years back.
00:42:58
Speaker
And since then, you know, we started the journey of listing ourselves or directly selling ah into many of the, you know, quick commerce or e-commerce players. And that's now about, you know, 15 to 20% of our volume.
00:43:09
Speaker
And that's growing quite rapidly as well. So we are almost a 100% online player. ah But in the last, ah you know, some months, we've also been starting to do ah retail. And that's now taken off quite well as well.
00:43:24
Speaker
Hopefully, you know, if we speak again, you know, in a little bit of time, we'd be a much broader omni-channel player across multiple channels. And retail, what is is it like a a meat shop or is it a like where you cook and serve also?
00:43:38
Speaker
No, no, we you do a a fish and meat shop. And that's the model that we do. We have about 30 stores right now. And roughly doing a small volume for us, like it's doing about 2-3 crore rupees of revenue per month. and But it's growing. It's ah it's obviously the ah a way to reach the larger, broader TAM. And that's another area we are focused on. But a fair amount of our energy has been created around what we know best, which is to sell online.
00:44:05
Speaker
Okay. How did the... I mean, you know the delivering to the consumer's home within that cold chain, ah did you build that in-house? Did you outsource it, work with third-party players? Does it know have third-party players?
00:44:19
Speaker
it's been painfully built hand-by-hand. Akshay, it's been a hugely... big part of what I spoke about earlier. right Building that supply chain is the motive. And building that to 140 cities at the scale with collection centers and they are all the way up to farms to harbors is really the key aspect of what we build. I'm i'm quite passionate about this because finally it you know, you have to get good quality product to the end consumer. You can't do this as a trader.
00:44:47
Speaker
ah You're trying to do this as a trader in the city is a hard, hard proposition to stand by the kind of food that you're selling. You have to really know where that food is coming from. You know where the traceability is coming from. Only then you need to know how much, you know, ah microbial content is there in all these different supply chain points. Only then you can stand by the quality of the product.
00:45:07
Speaker
And that's the only thing that's the keeping in my business. like That's the primary thing that keeps me afloat. And so we had to build it from scratch. Now in the last mile from between our, we have about 200 dash doors. Tell me from collection center onwards. So you told me harbor to collection center. So let's talk about fish as a category. So we have harbors and from harbors, it comes to the collection centers.
00:45:30
Speaker
From the collection centers, depending on the collection center, If it is South india India for example, it might come via refer truck to our main city. If we are talking about North India, like Delhi, then it will come by air. We also have a significant UAE operations.
00:45:45
Speaker
We are in all the 7 Emirates in UAE. It goes by ah you know Indigo or Asma, the supplies from India. And that's the supply chain to the city. Once it enters the city, it comes into a larger factory, typically the outskirts of the city.
00:45:59
Speaker
And we have 15 of these large factories to cater to sort of the 140 cities. Because many of these cities are satellite cities, like for example, Bangalore would serve Mysore and, you know, Pasoor and so on.
00:46:12
Speaker
And it would then come into these factories. Yeah, what what's a factory? A factory is a place where ah it would, ah the the the already, ah you know, ah the the fish, for example, we get cut into fillets or steaks or, ah you know, curry cut or the other STUs that you would want. It'll then get packed into a consumer packing and it'll then go to either our dark stores or it'll go direct to the consumer. So there are two kinds of deliveries that we have. We have scheduled delivery.
00:46:40
Speaker
which is if you order by night, you'll get it by the morning. And if you order by noon, you'll get it by the evening. Because that's what we call as the scheduled delivery. There you will have a variety of maybe, you know, 100 to 200 products of fish.
00:46:52
Speaker
And then if you look at the count all the sub-STUs like curry cut and phileas and so on, you're talking about potentially about 1,000 varieties of sub-STUs. And you will have ready-to-eat and chicken, mutton and others. And you're talking about what, 3,000 to 4,000 products.
00:47:08
Speaker
ah Then from there ah for the there, we also have another system of delivery called the express delivery, which is you know your 30 minutes deliver delivery or 60 or 90 minutes, ah which will have a reduced set of STUs, but the most frequently going STUs and that are in our dark stores.
00:47:24
Speaker
And we have almost 200 dark stores across all of India. All of the supply chain has been built from scratch and the consumer can then get there within about 30 minutes. now That's the the next foray of ah the delivery system.
00:47:37
Speaker
And from there, the bikers ah in ice boxes or with, you know, full panels across the boxes will then deliver it to the consumers. We have almost 5,000 delivery in a gig module and it goes down to the end consumer. That's the supply chain that we put.
00:47:53
Speaker
Why not piggyback on the dark store infrastructure of the quick commerce players? and They are adding, I believe, like thousands of dark stores every year. you would never be able to have that density which they have.
00:48:07
Speaker
ah You know, why not just ah go all in on using their dark stores? And I think even consumers now... 60 minutes, 30 to 60 minutes sounds like a long time. so You're right. And hence, ah hence it's not either or, right? We do both.
00:48:25
Speaker
So we are one of the largest selling fish of meat brands on Kip Commerce platform. And these are incredibly good partners where, you know, we are able to provide value in 140 cities, not just across chicken, which is much more common, ah but also across...
00:48:40
Speaker
these range of products. ah And we are able to do that ah across a bunch of these different platforms together and that portion of the business is growing. and ah But at the same time, ah consumers who require that kind of a variety, the commerce pairs may not be able to, in an economically efficient way, cater to do that.
00:49:00
Speaker
Primarily because, I'll just give you the unit economics, right? Because If you're talking about a kick-commerce dark stove, we'll roughly have about 1,000 orders or 1,500 orders a day, right? Or maybe 2,000 orders a day if you're like really saturated.
00:49:13
Speaker
ah Because you have to cater that at the 10 minutes ah radius of what you can do. And, you know, average penetrations are about 2-3% for meat. But, you know, maybe when we are there or other brands who are as good as we are, and we can push that up to maybe, say, 6-7 or 8%.
00:49:29
Speaker
So you're talking about 60. What does the penetration define? penetration is how much percentage of the total orders that comes into a QCommerce Darkstone will give you as meat, right? And that can... It's typically about, you know, depending on the player we work with, some partners that we work with has gone as high as, you know, 6, 7 or 8% or 10%.
00:49:51
Speaker
Others are in the sort of 2 to 2.5% rate. Because we're not the only player. There are multiple players the SQL system. And so what that essentially gives you is a a balance between wastages and variety, right?
00:50:03
Speaker
Because you if you say 6%, let's assume that number of 5% is the best that you can get, then youre or for that matter, then you're talking about 70 orders of fish or meat coming into a dark store for that particular 2-commerce store.
00:50:18
Speaker
Now, we have all the average, ah you know, maybe 200 plus, 150 or 120 core fish alone, then together with everything else, maybe 300 to 400 orders.
00:50:30
Speaker
So if you keep 200 or 300 orders with a shelf life of maybe 24 hours to 36 hours, and you only get 70 orders, you are going to end up in wastage, regardless of however you manage that replenishment. That's just the physics of it.
00:50:43
Speaker
So ah what then ends up happening is one of our dark stores, because we are uniquely catered and we've got that demand built over a period of time, we are getting 250 to 300 orders per day or maybe 400 orders per day.
00:50:55
Speaker
And in weekends, we can go up to sort of 700 to 800 orders. So we essentially have the ability to keep that kind of a range in our dark stores. Now, obviously, it can't be done with maybe over a period of time and you get done with 10 minutes.
00:51:08
Speaker
We have graduated to 30 minutes. So we cater to both sides of the consumer. We cater to the admin's consumers who want the 40 products that they can get or 14 to 15 products, which is the typical fast-moving product that's already there via the ClickCommerce and these are our partners and then they provide that value.
00:51:27
Speaker
If you want larger range, then we have the larger range through the Fresh2Homes phone app. So it's quite complimentary. In fact, it's been quite instrumental in getting us to be profitable as well. right Because you know the major metros, e-commerce is a city by city, pin code by pin code profitability game. that That's really how you make an e-commerce company profitable.
00:51:48
Speaker
The major metros where we are really strong, we already have that inherent demand, but we may not have that in a smaller system. And there, you know, the QCommerce players allow us to meet that gap.
00:51:59
Speaker
And even in major metros, in many of the the outskirts of the spaces where we don't have that density, we are able to partner. It's not an either or, it's a complementary relationship. And we are a significantly large brand on both QCommerce and on ah on our own app and hopefully in the next so many years through a retail platform as Okay. Is this a market which will have a few large players or is this a market which can accommodate multiple players? Because this space of ah ah e-commerce of for meat and fish, ah I mean, there is obviously one gorilla in the room of Lishas and then...
00:52:38
Speaker
ah There are a lot of smaller startups as well who are in this space, both from legacy houses as well as new age startups. ah How do you think this market is going to play out? Will there be consolidation with a few players or is there in enough space for multiple players?
00:52:53
Speaker
um I think it depends upon whether we open out the wet markets or not. right If you don't open out the wet market, then ah you know between us and Lish, this is ah possibly a fairly, we are about 1000 crores in revenue. So roughly with that, we'll probably see ah you know two players ah having the significant market mindshare.
00:53:15
Speaker
And it may be harder for ah to go in ah with own e-commerce. But otherwise, obviously, if you have distribution channels like e-commerce, we have you know, ah retail network. It is ah quite a large democratic platform.
00:53:29
Speaker
That's what I meant by whether it'll actually open out to the more wet market users as well. Because if you look at wet market users as well, it satisfies a different sort of a need state as well. And it it's it comes comes back from a consumer observation.
00:53:44
Speaker
ah The reason why people go to a wet market is not just for, you know, maybe prices or ah perhaps other things. It's also because inherently Indian fish or meat consumers are...
00:53:57
Speaker
are, you know, maybe this is just traditional, is that are being taught that what is being cut in front of you ah is fresh. And what's a packed product, there is a myth that it's not really a fresh product. it's It's something that, you know, ah the 60 million people that are fresh to home or delicious or others currently cater to over a period of time have learned that that's not the case.
00:54:19
Speaker
But there is a significantly large TAM, which still haven't really understood or been educated on this side. So there are enough and more opportunities for small companies or retail players or others to come in because it's a hugely large market.
00:54:33
Speaker
And if you're talking about the TAM, the the more online players have only touched a very small person percentage date of the stamp. right So the market is widely open and it's open for not just raw fish, it's also open for processed product. Because when we started out, we saw that about 6% of our revenue came from ready to eat or ready to cook. But what we're seeing now is that that has gone up to about 16 to 17%. So there's a huge uptick on, you know, breaded products, on gravies and all, you know, protein first, but effectively going into subcategories, which again have a huge amount of different needs and others that, ah you know, not everything can be done by people who do pure raw products. And that's another area ah that could be a significant growth factor.
00:55:21
Speaker
and Okay, okay, got it. Do you see the legacy players like, say, Godrej, Tyson, and even i you see ah There are a lot of these legacy players. Do you see them as competition?
00:55:32
Speaker
They don't have like a direct and dual player. I mean, these are all large brands that have been built over a period of time. And, but in the fish and meat space ah for the ah for the, you know, for maybe the 30 to 35 year old a sweet spot consumer, ah that may not yet be the top of their mind share. But I'm sure that over a period of time, especially as the market evolves, ah that could be a possibility. But for now, that's not really the strength of, ah you know, the sort of 60 million people that we're talking about.
00:56:03
Speaker
So do you also plan to ah go through the general trade channel? Like right now, the retail ah channel that you're doing is your own 100% fresh to home stores, right? Maybe franchisee owned or company owned, but they're like a dedicated fresh home store. But like say the Neelgiri or all of these chains, like in Delhi, there's modern. Yeah, we have not yet gone into that channel yet.
00:56:27
Speaker
ah We have, you know, ah been largely worried also about, ah not modern trade aspect, but with the rest on cold chain. Because if you look at sort of the cold chain, this is a key ingredient of this whole process. And ah the product and the brand gets a huge impact if that cold chain has got an impact. So we haven't yet ah figured that out. But that's probably our inefficiency of not being able to figure that out. Not really...
00:56:50
Speaker
The modern trades are doing, some of the modern trades are doing significant large volumes in this category. ah And that's an area that we have to spend more time on. ah So it's more our inefficiency of not being able to get there, but we have not done that So, you know, when you work with other retailers, ah is there a fear that you eventually these retailers will move to private levels? I mean, as any retailer grows, they want better market. Not really, right? Because there is a room for private level in this particular industry.
00:57:23
Speaker
But especially just given our strength is in ah in fish and just given you the kind of supply chain that exists, ah it may not even be profitable to do a private label. Let's imagine putting your, if you want to get, let's say, variety, right, which is essentially footfall driver.
00:57:40
Speaker
then it's very hard to do that without going to maybe 10 harbors or 15 harbors or 20 harbors. Now, we are in 350 to 400 harbors, of which you know at any given point, maybe 150 or 100 might be active.
00:57:53
Speaker
And ah that kind of a supply chain is important to build the variety. Now, it may be possible in chicken, right? Chicken, you might be able to do that much more faster and easier. But in fish, it's an incredibly intricate supply chain.
00:58:07
Speaker
And that supply chain, ah trying to go through that kind of a supply chain to build it, it's hard. It's not that it's not impossible, but it's hard to do that. And as a result, ah ah there is room for a player like us and ah room for us, especially given the brand values of no antibiotics and no preservatives. There is also room for private label brands.
00:58:29
Speaker
ah So I don't see that as ah ah you know something that would affect our business in the long term. ah Do you see ah consumer tastes changing with respect to non-witch? Like ah there is like this vegan movement and fake meat or like plant-based meat movement in the West. Do you see anything like that coming to India?
00:58:53
Speaker
I feel consumer movement will move towards more protein consumption, right? And we are seeing it ah quite actively. Even just, let's look at the stats itself, right? ah People are eating more and more proteins and milome cube and the and this is my prediction and I don't know whether this will be true or not, but I feel eventually India will become a net importer of fish.
00:59:14
Speaker
ah This is going to sound quite surprising, but it's already beginning to happen in many categories because the amount of fish that we are producing has only increased, right? Our overall, catch in our overall fish production has only increased. But our imports have also increased.
00:59:30
Speaker
You would be surprised, but we may have imported maybe about 550 to 600 containers. And each of these containers are like 40,000 tons of Vietnam basa in the last year. And obviously Fresh2Home does not sell Vietnam basa. We sell only our own farm basa, which is much more tastier.
00:59:46
Speaker
But just to give you the sense of the broader market, India will become a net importer. And this can't happen ah because of ah any other thing. it's just because people are getting more wealthier.
00:59:58
Speaker
The average GDP is increasing. And if you've looked at any market, when you know people become more wealthier, the consumption of proteins will increase. And ah we are at a woefully low per capita consumption of fish or meat. We are probably, don't know, 2 to 2.5 kilos per person. If you spread that across the entire gamut of people that we have, obviously, it will be concentrated across multiple people.
01:00:21
Speaker
Even if all of our folks in India eat one prawn momo extra, you're going to outweigh the whole export consumption that is there. Just given the sheer size of population. It's happening. I'm not talking about theoretically what was there. I can see it happening across the last 10 years that we've been in business.
01:00:40
Speaker
And I'm sure that eventually over a period of time, we'd be net importers of seafood. And that ah is essentially a category that's going to get there. You want to be ah like an India-focused player? Yeah.
01:00:52
Speaker
we are ah we are going to be a B2C focused player, right? I'm not going to be saying that we are going to be an India focused player because we are a B2C player and that's really what we understand. We know that market quite well.
01:01:03
Speaker
ah We started Dubai, you know, two, three years back. It's a beautiful market for us. poor realizations are much better. ah But at the same time, from a scale and breadth perspective, India is unbeatable, right? India is just a like significantly large economy and we are a sort of very small economy ah in a drop in the ocean at this point.
01:01:24
Speaker
And a thousand crores in this category is nothing, right? Because we are talking about a significantly large volume. And so I suspect that ah India is going to be that scale engine for compounding.
01:01:36
Speaker
And it's going to take some time to get there. But that's really the growth trajectory of FreshDome. I'm thinking about this ah lifestyle business because I'm a serial entrepreneur. I've done a bunch of different gigs. And so this is not my first rodeo. But at the same time, this is what really energizes me, right? Working with fishermen and farmers. So it is something that I want to build for the long term.
01:01:55
Speaker
I feel the compound compounding values that you would get ah by building a brand and then having a ah a macro, which is a significantly large growing economy, ah is going to be a really, really exciting one.
01:02:08
Speaker
How does Dubai work? You are sending from India, like from Indian harbors? We have about 300 to 400 people in Dubai. ah and we do a direct B2C.
01:02:20
Speaker
We also have some amount of frozen fish that we export from Dubai to other countries, but ah mostly almost all of it is B2C at this point. We are growing on the B2B side as well.
01:02:31
Speaker
A lot of what we sell, about 30-40% comes from India. That's actually quite high given the basket of products. We also do different species or different others from the other world markets. Oman is a huge contributor to that. Local catch is quite small but we are present in all the local harbors.
01:02:52
Speaker
ah So it's a mix of both but we are probably one of the largest fresh ah exporters from India to the UAE as well. And ah the play is the same, like consumers order online. Wouldn't CACs be very high there ah to acquire consumers?
01:03:10
Speaker
Surprisingly, CACs are lower than India. I suspect that's because India really maxed out, at least in the last two years, with QCommerce and others, right? So your CPMs in India, your cost per thousand eyeballs, ah is actually ah comparable across the two Jews. It is a surprising fact for me as well, but that's what we see.
01:03:31
Speaker
That's purely because of demand, right? There's a huge amount of demand going after that 60 million people in India or that 70 to 80 million people in India. So tax are, ah you know, comparably lower.
01:03:42
Speaker
ah ah Retentions are also higher. And then, ah you know, ah the average monthly purchase is probably 2 to 2.5 times higher as well, ah just because it's a much larger meat-eating community. So think the profit pools are higher.
01:03:57
Speaker
Okay, okay, okay. Understood. How much have you raised till date? We raised about $240 million dollars across, ah you know, four, up to my D round.
01:04:08
Speaker
ah In the last round, we had done about 100 million. Then the previous round was 100 million. And then everything else was the pre-A and B rounds. And ah what was the ah utilization of these funds? You needed these funds for what? Setting up the collection centers and the cold chain. and Like what did you need funds for? ah Like most D2C companies, right the biggest use of proceeds is to build a brand. right There's a significant amount of marketing spent.
01:04:35
Speaker
ah to build the brand. ah Large portions of that, about 50-60 million dollars, would have gone into CapEx, like setting up the dark stores, the factories and so on. A significant portion of the others would be into funding and building the brand. there's ah ah That is a significant amount of investment.
01:04:53
Speaker
ah In many years, you know up to 25-30% of my revenue was spent in building the brand. But over a period of time, ah we are now growing quite effectively with about 3% or 2% of marketing spend. And that's a huge achievement of where the brand is now touched.
01:05:11
Speaker
Okay. Okay. What's your headcount now? we If you come if you ah consider sort of the entire ecosystem of the butchers in delivery and without the delivery people, we are about 4,000.
01:05:22
Speaker
If you add the delivery folks, we are about 9,000 people. The corporate headcount would be about 300 to 350 people. yeah Okay. ah So, you know, I'd love to learn some ah people management principles from you, like, you know, managing such a large pool of people, which is a mix of blue collar, white collar, gig workers, and across multiple geographies. ah how How, what are like some best practices? So the first thing is basically that one,
01:05:50
Speaker
I'm not doing it myself, which is essentially a huge reason why have we have eight co-founders. right I don't know whether you've heard of other companies with eight co-founders, which would be a hard thing across the world. Not big ones. yeah yeah so Most companies have like one or two. Yeah. yeah So ah having eight co-founders and we are some of us are reasonably gray-haired and you know we've been out there for some time across multiple companies and so on. And each of us specialize in a particular area. So Thambakar, my co-founder, is a CFO.
01:06:19
Speaker
And he's a prominent CFO and he's been doing that across multiple of my companies. Amazing. ah So that's a key part of, ah you know, the ability to scale. First, you know, have a pool of co-founders who all specialize in various different areas.
01:06:33
Speaker
The second one ah is, ah we I tend to think about this as a VC who is funding smaller companies within the company. And to me, those are my different geographies. right So I have Bangalore as one another company. I have Delhi, I have the others. And these are all run by a CEO and it's run by CFO. So essentially, and a CTO centrally.
01:06:56
Speaker
So fundamentally, these are separate teams and it it can be to some extent very Darwinian in the sense that ah You know, these are different teams with different ideas and so on.
01:07:07
Speaker
I don't spend too much time trying to optimize too much best practices because I feel like ah it will, and this is counterintuitive, I feel like, ah you know, except in quality and delivery and all that stuff, which is, know, table states and we figured that over 10 years would be our best practices.
01:07:22
Speaker
In terms of new business ideas, new product innovations coming with new different things and so on. um I don't try to best practice at that particular thing because I feel like if you do that, then it no longer becomes a smaller company within the company. So we tend to think of this as a core value of be your own CEO.
01:07:39
Speaker
So each different business unit is this the is a separate company within the company and the corporate is obviously which funds these different companies. and Many of them will come with new proposals, new ideas.
01:07:50
Speaker
And that essentially creates entrepreneurs within the company. Because you're talking about a larger number of people, right? It's harder to manage that in a traditional top-down structure. It has to be a bottom-up structure.
01:08:02
Speaker
That's probably also the reason why we have got very little ah you know attrition issues at the senior level. and ah And these are established people who have been now around with us for almost a seven a or some are even like early 10 years tenure from the core management team.
01:08:21
Speaker
So just to summarize, it's around splitting the company into smaller sort of companies and then having a CEO to run each of these different units and having everybody think of themselves as a CEO and ah allowing some amount of risk taking. ah So we will always have what we call internally as a fresh to home lab.
01:08:40
Speaker
something new going on ah where people are trying something new. It may not be very obvious, but a fair amount of stuff actually has come in and some of them may be counterintuitive as well. right so For example, we launched milk, our own milk, which completely counterintuitive and you know would not work together with the full framework of fish or meat.
01:09:00
Speaker
And in many cases, it may be seen as stock and cheese between this thing. And I don't bother too much about what external world thinks about those those areas. It's just what the team wants to do. And eventually that milk business ah actually has hit a certain amount of scale.
01:09:16
Speaker
Similarly, ah when we started out fish farming, that was also completely counterintuitive. While we always wanted to do ah you know the the whole aspect around vertical integration in 2017 or 2018, when you try to pitch ah fish farming to a VC who is trying to come in and understand asset light operations, like because know the the investors have been extremely supportive, but at the same time, they all come in with different perspectives on how to manage stuff. Trying to pitch these, and especially since it has come from the team to do it, has been harder. So the the way that we manage that is,
01:09:50
Speaker
by having separate ah pools of ah you know initiatives that are not in line. And you you only make sure that you give x percent of priority or resources to those experimental projects.
01:10:04
Speaker
And we call that ah multiple shots at the goal. right And this is a gaming world because I come from the gaming world where to make a good game, you will have to launch maybe five, six, seven or eight or ten ah sort of experimental games. And then you will get a farm wheel out of it.
01:10:19
Speaker
so same way, there's been multiple such initiatives, some may work, some may not work, but we are you know ah careful enough to sandbox that with X amounts of resources. So even my board would probably be used to me saying that, hey, we are working on this project as an experiment.
01:10:35
Speaker
Eventually, after one year of experiments, some of it might get scrapped. Some of it actually may hit mainstream. And that's the nature of how we work. It's a very entrepreneurial culture. And it's a very entrepreneurial culture that's helped us thrive, you know, these, you know, ups and downs in the funding environment, you know, the ups and downs in how you can retain such senior amazing talent ah when there are you know maybe greener pastures for a period period of time.
01:11:00
Speaker
And that's really held us upload across this period of time. Fascinating. So, let's say the Bangalore CEO would largely be the sales CEO, or not the supply chain CEO, or right? Supply chain, I'm assuming, would be a centralized function.
01:11:15
Speaker
Yeah, supply chain would be a centralized function. ah But at the same time, the Bangalore CEO would have access to the P&L and would say that I need this at this price. And if you guys are slacking up, then I'll go find someone else to do it. There is that Darwinianism internally as well.
01:11:32
Speaker
And then i mean the question we'll then get asked is, okay, where are you getting your data from? right Are you ah basing your data based on something else? They say, yeah, I've got this vendor or this person being able to supply this to me at that and if you are not able to do it, I might as well go and do that stuff. You know, obviously there's a central function and a bunch of grey hairs will tell you that then will not get this at this quality or the other price.
01:11:52
Speaker
The CEO can always tell that, okay, then why don't you guys put your act right and get me at this price. So those kind of discussions are quite common, those kind of conflicts. ah are quite healthy and happens all the time. In fact, you know, a big part of my time, and that's the downside of having multiple CEOs, is trying to get alignment on this whole process. But I think it's healthy and that's really helped us grow across a period of time.
01:12:16
Speaker
Amazing, amazing. And what is your like profitability? Are you currently profitable or by when do you think you will be profitable? So we are ah we are ah profitable across all of our business units right now. A bit of profitable.
01:12:31
Speaker
ah Not any other metric. And the mature cities are all, ah you know, single, higher single digit ah profitable. ah Now what's left for us to be bridge the gap is really the corporate overhead. It's a fixed cost of ah ah the engineering team and a bunch of others. So if you put that across of our revenue, now as of ah in this month's hundred rate or the next couple of months,
01:12:55
Speaker
ah would be at about minus 6%. And ah hopefully by the next 6 to 9 months, I will bridge that. At what trend rate? We are currently at about $115 million, dollars ah which is I think about 1,000-ish crores overall, ah together with another small M&A that we've done.
01:13:15
Speaker
And we think ah we'll bridge that gap within potentially ah the next six to nine months with a small increase, maybe 10% or 15% increase in our top.
01:13:25
Speaker
Okay, amazing. And do you have like an IPO planned? We are looking at an IPO. We're potentially ah looking at something towards the end of next year. ah My primary goal ah is now to you know get to sort of a a scale and volume of profitability before I flip the company from Singapore to India.
01:13:46
Speaker
ah So we are in that process of figuring out the nuances for doing that. And then post that, we're looking at an IPO either towards the end of 2027 or in that whereabouts. That's the timeframe we're looking for an IPO.
01:13:58
Speaker
So what was the reason to incorporate in Singapore? So when we started out, you know, if you looked at, i don't know, if you looked at my old business plan, I have it in a piece of paper that I scribbled.
Business Strategy: Expanding Between India and GCC
01:14:10
Speaker
ah Idea was to be, ah you know, a player who would span both India and the GCC. It was actually built in day one because Matthew, my co-founder,
01:14:21
Speaker
ah was a fish exporter who knew the value of buying from India and then also selling it in outside India, but particularly in the GCC, because that's an area that he was quite familiar with. So UAE was not an afterthought. It was about making the India for the world. That's really how we thought through that process.
Corporate Structure and Future Plans
01:14:36
Speaker
And ah for that, the easiest ah structure to do at that point was a Singapore holding company. And it was much faster and easier to do that at that point of time. But ah now that ah over a period of time and what we've now realized is that, you know, just given the massive compounding growth that we're seeing in in the economy in India, it's hard not to ah be part of that. Right. And hence,
01:14:59
Speaker
We are now amalgamating back ah to India and then with a look for a public market listing by ah in the next year or so. yeah Okay. Okay. Okay. And when you are Singapore Incorporated, how do things like ESOPs, etc. work? Like employees get ESOPs for the Singapore entity?
01:15:17
Speaker
That's correct. It's all ah from the holding company. right That's where effectively the liquidity will happen. Okay, okay, okay, okay,
Advice for Aspiring Entrepreneurs
01:15:23
Speaker
got it, okay. So ah let me end with this. What advice would you like to share with young aspiring entrepreneurs?
01:15:29
Speaker
ah So I think, you know, ah one is, you know, I've figured this out is, you know, let's, you need to go in and you need to be passionate, right? You need that romance, right? You need that fire.
01:15:40
Speaker
ah But eventually you will get into a place where you'll realize that, you know, that fire, ah you will, if you try to do it on your own, is going to be a hard deal.
01:15:52
Speaker
So then you will have to share that with a bunch of people ah who you have to bring them in at that level. And hence, try to have more number of co-founders when, especially if you're trying to tackle a problem that is it incredibly operational in nature, it has got, you know, ups and downs and, you know, at one moment you'll run out of cash and then, you know, another moment you will not know how much runway you have remaining and so on. So that'll be the the first area of focus.
01:16:17
Speaker
Second, think about this and especially building a company in the first principles, right? Always think through, is it, you know, a large enough market? Do you really have an unfair advantage? And think through that unfair advantage piece many, many, many times.
01:16:31
Speaker
A pure brand alone may not be your unfair advantage. and and And in many cases, building that brand will take you that amount of capital and others. And that will be a significant ah sort of moat. But you will also have to build other ingredients around it that builds that unfair advantage. And if you're really sure about that unfair advantage, then you can expand like crazy.
01:16:55
Speaker
Otherwise, you will run into issues where you know when the music stops, you'll be left with ah you know trying really hard to figure out growth vectors or trying to figure out how do you get to profitability and so on. Just to summarize, try to do it with ah in a way where you are are doing with a more number of people.
01:17:13
Speaker
And ah the other one is really to think through this from a first principles with an unmet need and an unfair advantage. Fascinating. Thank you so much for your time, Shan. It was a real pleasure.
01:17:24
Speaker
Thank you, Akshaym. It was great to speak to you