With $ 11 Million in Funding, FreshToHome Expands to Offline Retail

India is currently the world's largest producer of milk, the world's second largest producer of fruit and vegetables, and has significant production of marine agriculture, meat and poultry products. Overall, the cold chain market for perishable goods logistics is expected to reach INR 2.618 billion by 2024, with a compound annual growth rate of 14.8% in the country.

However, the traditional supply chain is contaminated with chemicals. storage and logistics process. At the same time, in the vast network of perishable products, only 30% of the sector operates under an organized platform, the rest being managed by small and medium-sized unstructured private actors. Thus, the lack of transparency between the supply chain and the source of the demand as well as an inefficient logistics lead to a waste of more than 40% in this space.

Shan Kadavil, CEO of FreshToHome, a Bengaluru-based online marketplace for perishable products such as fish, poultry, mutton, steaks and tenderloin, are looking to change that. Serial entrepreneur and former CEO of Zynga, Kadavil aims to integrate artificial intelligence (AI) and the Internet of Things (IoT) into the cold chain, food security and process d & # 39; supply. The idea is to ensure that the delivery of last-mile perishables and chemical-free storage at an affordable cost are affordable.

Founded in 2015 by Kadavil and Mathew Joseph, accompanied by a team of key people from Zynga, the company is backed by angel investors Rajan Anandan, Mark Pincus, David Krane, and others.

In November 2018, the Company closed its $ 11 million Series A financing round led by CE Ventures with the participation of Das Capital, Kortschak Investments, TTCER Partners Nbader Holdings, M & S Partners, Al Nbader Holdings and Abdul Azeez Al-Ghurair of the United Arab Emirates, PLB and other investors based in Asia and in the valley.

Currently operating in Bengaluru, Delhi / NCR, Kerala, Chennai and Dubai, he plans to expand his operations to all Indian Level 1 cities, including Mumbai, Hyderabad and Pune. FreshToHome.com also uses these funds to further strengthen the supply chain by extending its patent-pending supply technology to fishermen and farmers in India.

Tushar Singhvi, director of CE Ventures, states: "FreshToHome is not only trying to streamline the industry, they are also using technology to revolutionize the way the industry operates. It's a very robust model and a sustainable mission, and we're extremely proud to support Shan and his team in this adventure. "

He started with the love of the fish

A fondness for the pure blue Malayali Kadavil fresh fish drove him to Sea To Home, a Kerala-based e-commerce platform, who delivered fish to Bengaluru where he worked at the time, but in 2013, Sea To Home ceased his activities

Unable to find anything that could be compared, Kadavil decided to find Mathew Joseph , founder of Sea To Home. "When I met him, I discovered the operational efficiency issues that the platform was facing." In a short time, the platform reached 4000 customers So I decided to finance it by an angel, "he recalled.

It was a turning point for Kadavil. The $ 50 billion opportunity in the fragmented Indian fish market and the size of the $ 30 billion poultry market pushed him to build his core team and to launch FreshToHome in 2015. "As we were also targeting poultry, we renamed the company," he added. [19659002] At present, fish is the main source of income for society. It has access to more than 1,500 fishermen in 125 coastal cities. With a team of 1000 people, it works on the star model. With four plants in Kerala, Bengaluru, Noida and Chennai, it has about 20 processing facilities and centers in every city, where 10 tons of meat are delivered daily.

The fish comes from independent fishermen and is cleaned daily. , processed and cut at the factory in accordance with industry standards. It is also tested to detect any trace of impurity or disease and is then delivered to the consumer.

Currently, he delivers 400 tonnes of fish and meat per month and grows at an INR of 12 Cr GMV per month. With 7,000 orders a day, it reaches 400,000 customers in India.

From the sea to the plate

Kadavil explained that a typical supply cycle in the fish sector is as follows: fisherman → agent of the coast → auction → seller → wholesaler → retail outlets in the city. Most of the fish available on the market are caught by large mechanized trawlers in the sea from three days to three months.

"There are about 5000 coasts in India and every 10 km you can find a fishing village that depends on traditional fishing methods. Due to the lack of predictability regarding the amount and type of fish that a fisherman can catch on a given day, the price is quite arbitrary. While the demand for the port is constant, the supply is rather irregular and wasteful of the product, "he added.

In addition, to ensure that the product stays fresh, the usual practice is to apply chemicals such as ammonia, chlorine or formalin on the fish. Thus, by the time the product reaches the consumer, not only does it have at least 5 to 6 days, but it also becomes a "chemical" fish, which presents a risk of food poisoning, outbreak of allergies or other serious diseases. .

"The same story is repeated in several supply chains. It's about changing the way the food chain is maintained in the Indian supply ecosystem. Our goal is to create an AI-based perishable food supply chain using the latest technologies, "he added.

FreshToHome reorganizes the seafood supply chain

To fill the existing gaps, FreshToHome has begun to develop a predictive-platform badysis based on the technology of product exchange. patent instance of the company.

The technology of product exchange allows the company to eliminate many intermediaries involved in the fish supply chain. In a simpler sense, it offered fishermen a smartphone app that allowed them to select the products they wanted to sell and bid on to be selected. The system then selects the vendor based on the demand for fish, location and other factors and places a purchase order, thus functioning as a virtual commodity exchange.

"In our initial research, we found that most fishermen were illiterate, but knew how to use smartphones, and they all use WhatsApp and know how to use the Internet," he said. added. This helped them to choose the application-based approach. The application includes elements of gamification to keep users engaged.

Although they initially had to face the challenges of the middleman groups, the company managed to convince them to work together to create a better supply chain. Today, FreshToHome manages the entire cold chain, with the majority of trucks arriving from the southern coast of the country.

Every 100 km, FreshToHome has its own trucks, which collect the fish and bring it back to the nearest collection. point. It is then shipped by air to the respective consumers, who placed the order on the Fresh2Home consumer app. "On average, each order is at a minimum of 200 INR. A night order is usually delivered the next morning and an order in the morning at noon at the latest. "

FreshToHome uses a high volume reverse osmosis system to produce ice, which is then used to avoid seafood to rot in the process. It has also deployed a cloud-based IoT system to regulate and monitor temperature. "This has reduced the gap between supply and delivery to 3 hours and improved a fisherman's earnings by 20%," Kadavil said.

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In order to make transparent supply and demand, the company has strengthened its background with AI-based algorithms. "We receive more than 1,000 price points daily, which tells us which fish is the cheapest and best quality to buy. Thus, we can now buy highly prized Gujarat fish at a lower price in Calcutta. In addition, depending on the number of daily orders, we can predict the demand, "he added.

It also helped them reduce waste. In the traditional seafood supply chain, the margin of loss is about 15%, while FreshToHome claims to operate with a loss margin of 1.8%. Kadavil said the company can predict demand and supply and know when to keep the supply chain on standby.

The Next Step: Retail Sales, Fish Farming and Organic Vegetables

When asked to face the competition from Licious, ZapperFresh and, Kadavil felt that the capital efficiency of FreshToHome was an advantage. He added that it was an income-driven business. In the future, it plans to convert its centers in different cities into retail outlets to meet the needs of those who have not yet switched to grocery, meat and fruit online shopping. Wed.

In addition to its retail projects, FreshToHome aims to create a technology farms park. Launched last year, the company already produces 60 tonnes of seafood on such farms.

Two types of farms are used. The first is a terra farm that uses a cage aquaculture technique, which is considered a low-impact, high-yielding practice popular in European countries. This involves the reproduction of fish in existing water resources in a net cage that allows the free flow of water. This breeding technique can produce up to 500 tons of fish by consuming very little energy and with minimal impact on the environment.

The second breeding technique used by FreshtoHome is called nano-farming, which is another version of cage aquaculture, but instead of natural. Water plans, fish are raised in large water tanks or pools. This helps farmers reduce their expansion costs and put in place a more powerful supply chain. But this type of methodology also has its concerns. Although the cage industry has made many technological advances in cage construction in recent years, the risk of damage and escape from storms is still a concern.

"In the next three years, we intend to build 10,000 nanotechnologies. We launched this initiative a year ago and currently operate 60 tonnes of fish per month. We have also identified groups of arable land near Bengaluru. Fish farming using the technique of aquaculture will be the main activity here, "he added.

The company also plans to produce chemical-free crops using natural manure from fish farming activities and landless agriculture. controlled environment.

FreshToHome's next focus on disruption is organic vegetables, which are extremely expensive in India. The company is working to make them more affordable in the coming months. Products from its landless holdings are already available in Bengaluru in a pilot phase, but as in large-scale agriculture, large-scale development operations to reach more cities depend on the commitment of FreshToHome in the vegetable sector and its ability to be patient. market.